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LMIRT Q4 DPU up 73%, FY19 DPU rises 9%

LIPPO Malls Indonesia Retail Trust (LMIRT) on Wednesday posted a fourth-quarter distribution per unit (DPU) of 0.52 Singapore cent, up 73.3 per cent from 0.30 cent in the same period a year earlier.

Excluding the impact of a higher realised foreign exchange loss in the fourth quarter of 2018 that is estimated to have reduced the DPU in the fourth quarter of 2018 by 0.13 cent, the increase in fourth-quarter DPU for 2019 over 2018 would have been 20.9 per cent.

Gross rental income for the quarter rose 8.1 per cent to S$39.5 million, due mainly to a positive rental reversion of 4.4 per cent and the recovering Indonesian rupiah.

Gross revenue for the three months ended Dec 31, 2019 rose 9.2 per cent to S$69.6 million on higher income from service and utilities recovery charges.

Net property income (NPI) in the fourth quarter rose 23.9 per cent to S$47.6 million, led by lower property operating and maintenance expenses through more efficient cost management as well as lower allowance for doubtful debts.

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Full-year DPU in 2019 was 2.23 cents, up 8.8 per cent from 2.05 cents in 2018.

Full-year gross rental income was flat from 2018 while gross revenue rose 18.5 per cent to S$273 million and NPI rose 6.8 per cent to S$176 million.

Average portfolio occupancy in the fourth quarter was 91.5 per cent, above the industry average of 81.1 per cent.

As at end-2019, LMIRT's gearing ratio stood at 35.9 per cent with interest cover at 4.3 times.

James Liew, chief executive officer of the Reit manager, said: "We are pleased with the improvement in the Trust's performance in 2019 against 2018 which was largely supported by the recovering rupiah, and our continuous efforts to enhance our assets to optimise space, value and tenant mix, as well as our stringent cost management.

"Going forward, we will continue to reinforce our asset management strategy to bolster the performance of our portfolio as well as capitalise on opportunities to grow inorganically."

In December, LMIRT announced its first divestment initiative with the sale of Pejaten Village and Binjai Supermall. They were divested at a premium of 33.3 per cent and 19.3 per cent respectively over their purchase prices.

Mr Liew added that the Covid-19 outbreak in Asia has not hurt the Reit's operations so far. LMIRT has 30 properties located in 12 major cities across Indonesia.

He said: "Shopper traffic from the start of 2020 to Feb 16 registered a 0.7 per cent increase over the same period in 2019. Only Lippo Mall Kuta, which represents only 2.2 per cent of our total net lettable area, our sole mall in Bali, a market that relies heavily on China-based visitors, saw a decline in shopper traffic due to the imposed travel restrictions. This is, however, not expected to adversely affect our financial position."

Mr Liew added that contingency measures have been put in place within all of LMIRT's malls to protect the health of staff, tenants and shoppers.

The Q4 DPU will be paid on March 26.

Net tangible asset value per unit was 28.00 cents as at Dec 31, 2019, down from 28.35 cents as at Dec 31, 2018.

Units in LMIRT rose half a cent or 2.27 per cent to S$0.225 on Wednesday before the results were announced. Based on the closing price of S$0.225, the latest distribution translates to a yield of 9.9 per cent.

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