EC WORLD Real Estate Investment Trust (Reit)’s distribution per unit (DPU) fell 32.8 per cent to 0.916 Singapore cent for its third quarter ended Sep 30, from 1.364 cents a year ago.

Gross revenue for the China-focused e-commerce logistics landlord was down 9.5 per cent to S$27 million for the quarter, from S$29.8 million a year ago. Net property income (NPI) was down 8.5 per cent to S$24.7 million, from S$27.1 million a year ago.

This was mainly due to a weakening of the renminbi against SGD by 8.7 per cent year on year and straight-line rental adjustment, offset by organic rental escalations and higher late fees, the Reit manager said in a bourse filing on Tuesday (Nov 7).

Distributable income to unitholders declined 32.9 per cent year on year to S$7.4 million, from S$11 million.

Besides the impact of the weakening renminbi, the Reit manager attributed the fall in distributable income to the increase in finance costs – which rose 10.8 per cent in the quarter to S$11.8 million – driven by higher interest rates.

The Reit has also retained 10 per cent of the total amount available for distribution in Q3 FY2023 for general working capital purposes, its manager said.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

No distribution has been declared for the period Jul 1 to Sep 30, 2023.

The manager announced on Sep 27 that the Reit will be deferring its first-half FY2023 distribution payment to a future date when the Reit has sufficient free cash.

EC World Reit and its subsidiaries are owed more than 171 million yuan (S$32.3 million) in overdue receivables, and trading in the units of the Reit has been suspended since Aug 31.

For the nine months ended Sep 30, the Reit’s DPU was lower at 2.969 Singapore cents, from 4.134 cents a year ago, while distributable income fell 28.2 per cent to S$24 million. Gross revenue was 11.2 per cent lower at S$82.7 million, while NPI was 9.9 per cent lower at S$76.5 million.

Goh Toh Sim, executive director and chief executive officer of the Reit manager, said EC World Reit and its subsidiaries have faced challenges to maintain operations and meet financing obligations for the past three quarters in 2023.

While all efforts are being concentrated towards the collection of rental receivables in order to fulfil the Reit’s various operating and financing obligations as well as to lift its trading suspension, he pointed out other challenges resulting from high interest rates and the weak renminbi against the Singapore dollar and the US dollar.

These challenges “will continue to build up additional pressure for the business of EC World Reit”, Goh warned.