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Financial Results


2018 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS AND DISTRIBUTION ANNOUNCEMENT

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Profit & Loss

Profit & Loss 1Q2018

Balance Sheet

Balance Sheet 1Q2018

Review of Performance

1Q 2018 vs 1Q 2017

Gross rental income is S$0.7 million lower than 1Q 2017, mainly due to weakening of Indonesian Rupiah against Singapore Dollar, and lower rental income as a result of non-renewal of the master leases over the 7 Retail Spaces. The impact from weakening of Indonesian Rupiah and non-renewal of the master leases over the 7 Retail Spaces is partly offset by additional rental income due to acquisition of Lippo Plaza Kendari in June 2017, Lippo Plaza Jogya and Kediri Town Square in December 2017 respectively.

Property operating expenses are S$2.7 million higher than 1Q 2017, mainly due to costs incurred for maintenance and operations of Retail Spaces and Kediri Town Square, as well as a net allowance for doubtful debts made of S$738,000 (as opposed to a net reversal of allowance for doubtful debts in 1Q 2017 of S$370,000). Income tax expense is S$1.6 million higher than 1Q 2017 mainly due to the new tax regulations in Indonesia which came into effect on 2 January 2018. Refer to item 1 (a) (i) Statement of Total Return on page 3 of the results announcement for details on the new tax regulations.

Other losses (net) comprise realised and unrealised foreign currency gains/(losses) and realised and unrealised hedging contracts gains/(losses). It also includes amortisation of intangble assets in relation to LPB, PICON, Kuta, Kendari and Jogja.

Distribution to perpetual securitities holders is S$2.0 million higher than 1Q 2017, due to issuance of S$120 million of perpetual securities at a distribution rate of 6.6% per annum in June 2017.

The Trust has foreign currency options contracts to mitigate its exposure on currency movement as the majority of the Trust's income is in Indonesian Rupiah. The unrealised gain/ loss on foreign currency options contracts is a non-cash item and does not affect the amount of distribution to unitholders.

Commentary

Growth prospects for the Indonesian economy remain strong, with the World Bank projecting GDP growth of 5.3% in 2018, driven by more robust investment and exports, while private consumption is expected to receive a boost from continued moderate inflation and lower consumer lending rates.

While Indonesia's inflation edged up slightly to 3.4% in March from 3.2% in February, it remained well in the range of the Central Bank's target range of approximately 2.5%-4.5%. Full-year inflation is expected to come in at 3.5%.

On the retail front, Indonesia's retail sales grew 1.5% in February 2018 from a year ago, reversing a contraction of 1.8% y-o-y in January 2018. The survey of 700 retailers in 10 major cities also projected that March retail sales would rise by 1.7% on an annual basis.


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