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Lippo Malls Indonesia Retail Trust’s Latest Earnings: What Investors Should Know

Lippo Malls Indonesia Retail Trust (SGX: D5IU) is a retail real estate investment trust (REIT) that invests in retail properties in Indonesia. Its portfolio comprises of 21 retail malls and seven retail spaces located within other retail malls. The properties are located in Indonesia’s major cities with a large middle-income population. The REIT’s sponsor is PT Lippo Karawaci Tbk, which also sponsors healthcare REIT, First Real Estate Investment Trust (SGX: AW9U).

Yesterday, Lippo Malls Indonesia Retail Trust announced its financial results for the second quarter ended 30 June 2017 (2Q2017). The reporting period was from 1 April 2017 to 30 June 2017.

Here’s a quick rundown on the financial figures from the earnings release:

1. Gross revenue for 2Q2017 grew 6.6% year-on-year to S$49.9 million. Acquisition of Lippo Mall Kuta by the REIT at the end of 2016 and positive rental reversions mainly helped to lift up revenue.

2. Net property income (NPI) was at S$46.8 million for the quarter, up 8.6% as compared to 2Q2016.

3. The reporting quarter’s distribution per unit (DPU) was at 0.90 Singapore cents, up from 0.85 cents seen a year ago. This translates to a 5.9% increment in DPU.

4. The net asset value (NAV) per unit was at S$0.37, as at 30 June 2017.

In June this year, the REIT expanded its portfolio to 28 investment properties with the addition of Lippo Plaza Kendari, which is located in the heart of Kendari, the capital of Southeast Sulawesi, Indonesia.

For 2Q2017, the REIT recorded a strong uplift in rental reversion rate of 13.0% as compared to 7.5% achieved in 1Q2017. In 2Q2016, the rental reversion was lower at 6.3%. Meanwhile, the committed occupancy of its portfolio remained stable at 94.3%, higher than the industry average of 85%. The weighted average lease expiry (by net lettable area) came in at 4.32 years.

As at 30 June 2017, the trust had a gearing ratio of 30.6%, an improvement as compared to 31.5% seen at the end of 2016. 70% of the REIT’s debt is on a fixed rate basis, helping to mitigate the impact of interest rate fluctuations. The weighted average maturity of debt facilities is 2.09 years.

The trust closed at S$0.455 yesterday. This gives a historical price-to-book ratio of 1.23 and a trailing yield of 7.7%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.