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EC World Reit trims Q3 DPU to 1.489 Singapore cents amid acquisition timing mismatch

EC WORLD Reit, which focuses on China’s logistics property market, cut distribution per unit (DPU) to 1.489 Singapore cents in the third quarter, from 1.57 Singapore cents before.

Distributable income shrank by 4.4 per cent year on year for the three months to Sept 30, to S$11.9 million, the manager said in results released on Thursday.

This was even as net property income rose by 3.2 per cent to S$22.9 million and gross revenue grew by 7.5 per cent to S$25.7 million, helped by the acquisition of Fuzhou E-Commerce in August.

The manager blamed the decline in DPU on a weakening yuan, as well as “technical timing difference between the loan drawdown and completion of acquisition of Fuzhou E-Commerce”.

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The books for the latest quarter’s payout close on Nov 15, with the DPU to be made on Dec 26.

EC World Reit has paid out DPU of 4.537 Singapore cents for the nine months, against 4.609 Singapore cents before, as distributable income dipped by 0.7 per cent to S$36.1 million.

For the nine months, net property income declined by 1.9 per cent to S$65.3 million, while gross revenue ticked up by 0.7 per cent to S$73.3 million.

The weighted average lease expiry (WALE) of the eight-asset portfolio was 4.3 years by gross rental income, while gearing was 39.6 per cent, as at Sept 30. The Reit had previously reported WALE of two years as at Dec 31, 2018, and leverage of 31.5 per cent.

The manager noted that EC World Reit’s tenants deal in domestic businesses that are not directly affected by ongoing trade tensions between China and the United States.

“As China gears itself towards a more consumption-driven economy, EC World Reit is well positioned to capitalise on the potential of the domestic market for growth,” it said.

The counter closed flat at S$0.74, before the results were released.