LMIRT's Q3 DPU falls 87.5% to 0.07 Singapore cent

LIPPO Malls Indonesia Retail Trust (LMIRT) reported an 87.5 per cent year-on-year decline in its a distribution per unit (DPU) in the third quarter of 2020 to 0.07 Singapore cent, its manager said in an exchange filing late on Monday night.

Net property income fell 70.2 per cent to S$13.1 million, while gross rental income slid 61.1 per cent to S$15.2 million. Total gross revenue declined by 58.3 per cent to S$28.9 million.

The company's Q3 performance however improved from Q2, with gross rental income rising 20.9 per cent. Net property income grew 2.5 per cent, while total gross revenue increased by 5.4 per cent.

The company said this improvement follows the easing of large-scale social restrictions in Indonesia and the consequent reopening of LMIRT's assets on shorter operating hours.

Distributable income however saw an 87.3 per cent decline to S$2 million in Q3, and this was 34.7 per cent lower than in Q2.

"With operating hours being shortened from 12 hours to eight hours, and capacity capped at 50 per cent, we have extended reliefs on rental and service charges to all tenants to support their business recovery. Certain tenants such as the entertainment outlets remain closed, and these continue to receive rental waivers from us," James Liew, chief executive of the reit manager, said.

"To ensure sustainable distribution, the significance and underlying solid fundamentals of the proposed acquisition of the iconic Lippo Mall Puri is even more important today as when this acquisition was originally communicated in March 2019," Mr Liew added.

The acquisition provides a steady and accretive stream of income with a guaranteed net property income until 2024, he said.

In addition, the strategic benefit of the associated rights issue will unlock the distribution restrictions currently imposed by the US-dollar notes, he said.