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9 Quick Things That Investors Should Know About Lippo Malls Indonesia Retail Trust’s Latest Results

Last week, Lippo Malls Indonesia Retail Trust (SGX: D5IU), or Lippo Malls, reported its 2018 second quarter (Q2 FY18) earnings update. As a quick introduction, Lippo Malls is an Indonesian retail estate investment trust (REIT) listed in Singapore.  It has a portfolio of 23 retail malls and seven retail across Indonesia.

Here, let’s look at nine things that investors should know about its latest results:

1. Quarterly gross revenue grew 5.5% to S$52.7 million while net property income declined by 7.8% to S$43.2 million, respectively, as compared to the same period last year.

2. Distribution per unit (DPU) plunged 34.4% (in Singapore dollar terms) as compared to the same period last year to 0.59 Singapore cents.

3. Based on Lippo Malls annualised DPU of 2.52 cents and its closing unit price of S$0.32 as of 3 August 2018, the REIT has a trailing distribution yield of 7.9%.

4. As of 30 June 2018, the REIT’s gearing stood at 36.0%, which is a safe distance from the regulatory ceiling of 45%.

5. The REIT’s latest occupancy rate stood at 93.6% at the end of the quarter, compared to the industry average of 84.2%.

6. The weighted average lease expiry profile (by net lettable area) was 3.94 years, with 47% of the leases to expire within the next four years. The remaining 53% will expire after 2022.

7. The average rental reversion for the current quarter was 4.2%.

8. Lippo Malls has the right-of-first-refusal to acquire PT Lippo Karawaci Tbk’s malls. Lippo Karawaci, which is the REIT’s sponsor, currently manages 47 malls, and has plans to develop 38 more.

9. Chan Lie Leng, CEO of the REIT’s manager, commented on the latest performance:

“As anticipated earlier in the year, the Rupiah’s continued depreciation has impacted overall earnings, while the effect of the new tax regulations has also been felt on our bottom line results. On the other hand, we have benefited from our enlarged portfolio, with the three new acquisitions in 2017 contributing to total gross revenue growth.

With all our assets, we have continued to exercise astute management of the spaces and tenants to optimise shopper traffic and increase rental earnings. The Trust is not overly-reliant on any single tenant and maintains a diverse mix of international and local brands to attract shoppers. Our portfolio’s occupancy remained high at 93.6%, compared to the industry average of 84.2%, with 10,614 square metres of space renewed in 2Q 2018 at a positive rental reversion of 4.2%.”

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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 Lawrence Nga doesn’t own shares in any companies mentioned.