Last week, Lippo Malls Indonesia Retail Trust (SGX: D5IU) announced its 2017 fourth quarter and full year earnings update. As a quick introduction, Lippo Malls is the first and only REIT listed in Singapore that has a focus on retail malls in Indonesia. It has a portfolio of 23 retail malls and seven retail spaces located across Indonesia as of 31 December 2017.
Here are 10 things investors should now about the REIT’s latest results:
1. Gross revenue for the reporting quarter grew 1.2% year-on-year to S$49.3 million whilse net property income inched up by 0.8% to S$ 44.9 million,
2. The REIT’s distribution per unit (DPU) for 2017’s fourth-quarter declined by 9.2% (in Singapore dollar terms) year-on-year to 0.79 cents.
3. Based on Lippo Malls Indonesia Retail Trust’s 2017 total DPU of 3.44 Singapore cents, and its closing unit price of S$0.385 as of 23 February 2018, the REIT has a trailing distribution yield of 8.9%.
4. As of 31 December 2017, the REIT’s gearing stood at 33.7%, which is a safe distance from the regulatory gearing ceiling of 45%.
5. The REIT’s portfolio had a committed occupancy rate of 93.7% at end-2017, higher than the industry average of 84.4%.
6. The weighted average lease to expiry (by net lettable area) was 4.13 years as of 31 December 2017.
7. The top 10 tenants of the REIT account for 30.4% of its gross rental income. The largest tenant, namely Matahari Department store, accounts for 13.1% of Lippo Malls Indonesia Retail Trust’s rental income.
8. In 2017, Lippo Malls Indonesia Retail Trust completed three acquisitions, namely, Lippo Plaza Kendari, Kediri Town Square, and Lippo Plaza Jogja.
9. The REIT has the right of first refusal (ROFR) to acquire the malls under its sponsor, PT Lippo Karawaci Tbk. Lippo Karawaci currently manages 46 malls, and has plans to develop 40 new malls by 2030.
10. Here’s a comment that Chan Lie Leng, CEO of the REIT’s manager, gave in the earnings update on the REIT’s latest performance:
“Our Q4 result was certainly impacted by cost relating to the change in trustee, reduced income from the retail spaces and narrower gains from our hedges due to a weakened Rupiah for that quarter.
Notwithstanding this, we are still able to report a steady 0.9% increase in our full year DPU to 3.44 Singapore cents, and adjusted full year DPU would have been 3.49 Singapore cents, a gain of 2.3% if the change of trustee cost was not incurred.”
Meanwhile, we believe we’ve identified a REIT dividend dynamo whose financials are strong enough to qualify its dividend as “safe” – and have profiled this stock in a research report that’s now available to download completely free of charge. Simply click here to claim your copy today!
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.