Lippo Malls Indonesia Retail Trust lowers Q2 DPU by 18.2% to 0.09 S cent

LIPPO Malls Indonesia Retail Trust (LMIRT) plans to pay a second-quarter distribution per unit (DPU) of 0.09 Singapore cent, down from 0.11 cent the year before.

The payout, which takes the half-year DPU to 0.17 cent, came on the back of contributions from Lippo Mall Puri, acquired in January, and the revenue impact of lower discounts on rent and service charges.

Distributable income stood at S$4.74 million for the three months to June 30, reversing the negative sum of S$11.3 million before, the manager disclosed on Monday.

Net property income more than doubled to S$31.8 million, against S$12.8 million previously, while gross revenue jumped by 81.3 per cent year on year to S$49.7 million.

Rental revenue from Puri was, however, partially offset by the loss of income from Binjai Supermall and Pejaten Village, which were divested in Q3 2020.

Retail operations have also been affected by the dire Covid-19 epidemic in Indonesia, where emergency public health restrictions have left 17 of LMIRT's 22 shopping centres shuttered - until at least Aug 2, if restrictions are not further extended.

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The trust is extending rental waivers to tenants who have not been allowed to operate, and is considering more rental support and utilities and service charge discounts. However, it noted that "there may be timing differences in the recognition of the revenue and the actual granting and recording of additional rental and service charge discount to the tenants due to delays in negotiations between such tenants and asset owners".

Yet, citing uncertainty over the situation, the manager said that "it is currently difficult … to ascertain the full impact of the crisis on the financial performance of the trust".

The management also warned that it is "reasonably likely that the pandemic will have an adverse effect on the trust's income and return in near future, the extent of which will depend on how long the aftermath of the pandemic will last".

Portfolio weighted average lease expiry by net lettable area was 3.6 years, while occupancy came in at 83.4 per cent. Meanwhile, LMIRT's gearing was 42.5 per cent, with a weighted average debt maturity of 3.3 years.

For the half year, net property income was up by 9.5 per cent to S$57.6 million, with gross revenue higher by 1.0 per cent at S$93.3 million.

Units closed on Monday at 6.2 Singapore cents, before the results were out.