Revenue for the three months inches up 1.4% to S$49.9 million

 

[SINGAPORE] Lippo Malls Indonesia Retail Trust (LMIRT) on Monday (Apr 28) posted a 2.4 per cent decline in net property income to S$29.2 million for the first quarter ended Mar 31, from S$29.9 million a year prior. 

 

This came amid a 3.4 per cent depreciation of the rupiah to the Singapore dollar, said the trust&rsquo s manager in a media release accompanying the results. 

 

In rupiah terms, net property income inched up by 1 per cent to 352.1 billion rupiah. This was mainly from a net reversal for an impairment loss on trade receivables, following a successful collection from a certain credit impaired tenant, it said. 

 

The rupiah&rsquo s depreciation also resulted in a marginal 0.2 per cent drop in rental revenue to S$27.5 million in Q1, said the manager. 

 

Meanwhile, revenue rose 1.4 per cent to S$49.9 million in Q1, from S$49.2 million in the corresponding period last year. It was driven primarily by a 67.4 per cent jump in car park income, following the trust&rsquo s entry into a new car park management arrangement. 

 

No distribution was declared for the quarter. 

 

The trust had previously announced it would cease distributions to the holders of its S$140 million and S$120 million perpetual securities in a bid to conserve cash. 

 

On Monday, the manager noted that the &ldquo maturity issues&rdquo of previous refinancing exercises have been &ldquo substantially&rdquo addressed, with the group working to reduce its debt. But its non-restricted cash and cash equivalents decreased to S$17.2 million as at Mar 31, from S$20 million at the end of December 2024. 

 

The manager added that global and domestic economic uncertainties remain elevated, and may continue to cause a persistently high interest rate and volatile foreign exchange environment. 

 

The inflationary effects of recent tariff measures and geopolitical tensions could also affect the retail environment, it said. &ldquo With these uncertainties persisting, the potential impacts remain uncertain and could negatively affect the sustainability of LMIRT&rsquo s existing capital structure, its leverage ratio, credit ratings, (its) access to capital and its ability to maintain compliance with financial covenants.&rdquo  

 

Until the trust&rsquo s financial and cashflow positions improve, the manager said, distributions to both unitholders and holders of its perpetual securities will continue to be withheld.

 

For the quarter, the trust&rsquo s average portfolio occupancy edged up to 82.2 per cent, from 81.2 per cent at the end of December 2024. This was underpinned by 41,971 square metres of new lease commitments, said the manager&rsquo s chief executive officer James Liew. 

 

Weighted average lease expiry by net lettable area stood at 2.9 years as at Mar 31, with an average rental reversion of 3.9 per cent and renewal rate of 79 per cent. 

 

Shopper traffic continued to recover in the quarter, up 7.4 per cent to 32.8 million shoppers. Liew attributed the improvement to the trust&rsquo s diversified tenant mix, with increasing emphasis on food and beverage, leisure and entertainment sectors to align with evolving consumer preferences. 

 

&ldquo In 2025, we will continue to actively execute a phased series of asset enhancement initiatives across our portfolio, designed to elevate shopper experience, optimise space utilisation and align with the requirements of our tenants,&rdquo said Liew. 

 

At the same time, he said, the group will manage capital carefully, making its monthly principal repayments and redeeming the remaining US dollar bonds due in February 2026. As at Mar 31, the trust&rsquo s gearing stood at a &ldquo stable&rdquo 44.2 per cent. 

 

Lippo Malls Indonesia Retail Trust (LMIRT) has reported a lower net property income for the FY2024 ended Dec 31, 2024 of $115.7 million, down 5.5% y-o-y. 

 

The trust&rsquo s rental revenue came in 2.2% y-o-y lower for the FY2024 at $108.2 million. In its reporting currency, the trust saw a 4.4% depreciation in Indonesian rupiah against the Singapore dollar. 

 

Gross revenue edged down 1.4% y-o-y to $194.6 million. 

 

For the 4QFY2024 reporting period, the trust saw a 2.8% y-o-y decrease in net property income of $27.8 million. 

 

Rental revenue and gross revenue for the 4QFY2024 saw a 1.5% y-o-y increase and 2.9% y-o-y increase to $26.9 million and $49.3 million respectively, from the previous reporting period. 

 

The trust says that topline growth was mainly due to an increase in carpark income by 70.1% in Singapore dollar terms. In 4Q2024, the trust entered a new carpark management agreement with the operator which resulted in higher gross carpark income. 

 

The group says that net property income dipped largely on net allowance for impairment loss on trade receivables and higher property operating and maintenance expenses. 

 

The trust did not declare any distributions per unit for the FY2024, consistent with the FY2023 reporting period. 

 

As at Dec 31, 2024, the group had a total debt of $735.2 million, and gearing stood at 44.78%. Its weighted average maturity of debt came in at 6.53 years, while all-in cost came in at 8.54%. 

 

As at Dec 31, 2024, the interest coverage ratio (ICR) of LMIRT is 1.36 times. All REITs are subject to a minimum ICR threshold of 1.5 times and aggregate leverage limit of 50% according to the Monetary Authority of Singapore. 

 

The trust says that it will continue to exercise prudence in capital management and does not intend to incur additional borrowings until the breach of ICR is rectified.

This is mainly due to non-operational accounting adjustments made to Ebitda and interest expenses in Q2 and Q3

 

LIPPO Malls Indonesia Retail Trust (LMIRT) : D5IU +12.5% will &ldquo potentially&rdquo not be able to meet the minimum interest coverage ratio (ICR) requirement for the financial year ended Dec 31, 2024, said its manager on Tuesday (Jan 14).

 

This is mainly due to &ldquo non-operational accounting adjustments made to both the Ebitda (earnings before interest, taxes, depreciation and amortisation) and interest expenses of LMIRT in the second quarter ended Jun 30, 2024, and the third quarter ended Sep 30, 2024&rdquo , said its announcement filed to the bourse after market closed.

 

However, the manager noted that the breach will not incur negative financial consequences.

 

The minimum ICR requirement of 1.5 times by the Monetary Authority of Singapore (MAS) was updated in July 2024 to apply at all times to all real estate investment trusts (Reits).

 

Prior to the change, a 2.5 times ICR requirement was to be met only by Reits which intended to increase their aggregate leverage from 45 per cent to 50 per cent. 

 

The manager clarified that the aggregate leverage ratio of LMIRT as at Dec 31, 2024, will remain below 50 per cent, as the aggregate leverage limit requires.

 

It added that LMIRT&rsquo s existing financial debt obligations do not contain any financial covenants with reference to the ICR or the aggregate leverage ratio requirement, and thus it expects no negative financial consequences arising from any breaches of such ratios.  

 

The ICR estimate is subject to the finalisation of the financials for FY2024, noted the manager.

 

Late last year, both Moody&rsquo s Investor Service and Fitch withdrew LMIRT&rsquo s credit ratings.

The agencies also withdraw ratings on notes issued by LMIRT&rsquo s wholly owned subsidiary, LMIRT Capital

 

TWO ratings agencies have withdrawn Lippo Malls Indonesia Retail Trust&rsquo s : D5IU 0% (LMIRT) credit ratings.

 

Moody&rsquo s Investor Service withdrew LMIRT&rsquo s &ldquo B2&rdquo corporate family rating, following a review of the issuer&rsquo s request for it to withdraw its rating.

 

The rating agency has also withdrawn the &ldquo Caa1&rdquo backed senior unsecured rating on the US dollar notes issued by LMIRT&rsquo s wholly owned subsidiary, LMIRT Capital.

 

Prior to the withdrawal, the outlook on all of LMIRT&rsquo s ratings were stable, said the manager in a bourse filing on Tuesday (Sep 17) evening.

 

Separately, Fitch plans to withdraw the ratings on LMIRT and the unsecured notes issued by LMIRT Capital on or about Sep 30, citing commercial reasons.

 

Fitch&rsquo s international ratings on LMIRT&rsquo s long-term issuer default rating stands at &ldquo CCC+&rdquo and &ldquo CCC-&rdquo on the senior unsecured US dollar notes issued by the subsidiary, with a recovery rating of &ldquo RR6&rdquo .

 

The manager said that noteholders of the residual US$22.6 million senior unsecured US dollar notes issued by LMIRT Capital, due on Feb 9, 2026, can continue to rely on its disclosures or any information related to the real estate investment trust.