Financial Results
Consolidated Statement of Total Return for the Quarter ended 30 September 2008
General Footnote:
- YTD 2008 includes private trust period from 8 August 2007 to 18 November 2007 ("Private Trust Period") and public trust period from 19 November 2007 ("Listing Date") to 30 September 2008.
- The forecast is based on forecast shown in the Prospectus.
Balance Sheet
General Footnote:
- YTD 2008 includes private trust period from 8 August 2007 to 18 November 2007 ("Private Trust Period") and public trust period from 19 November 2007 ("Listing Date") to 30 September 2008.
- The forecast is based on forecast shown in the Prospectus.
- The cash generated from the profit of the Sun Plaza property is included in the return of capital. The return of capital comprises the amounts received by LMIR Trust from the redemption of its investment in the redeemable preference shares in the Singapore SPCs.
- The carrying values of the properties are stated based on the independent valuation as of the acquisition dates and additional costs incurred for property improvements.
Review of Performance
Third Quarter Performance
Overall, distribution to unit holders for the third quarter is S$17 M, which is S$1.6 M or 11% above the forecast for the same period.
Total gross revenue at S$26.6 M, is S$5.6 M higher than forecast, due mainly to the contribution from the Sun Plaza property which was acquired on 31 March 2008. Gross revenue from the other properties were above the forecast.
Property operating expenses for the quarter are S$1.5 M, which is S$0.2M above forecast. Excluding Sun Plaza, operating expenses are S$1.3 M, which is in line with forecast.
The higher gross revenue resulted in the net property income being S$5.4 M higher than forecast, or 27%.
An interest income of S$0.4 M is earned from the surplus of funds placed in deposits with banks. The financial expense of S$2.4 M is mainly the interest cost arising from the S$125 M loan which was drawndown for the acquisition of the Sun Plaza property.
The higher management fee at S$1.8 M, which is S$0.3 M higher than forecast, is due mainly to the fees payable for the Sun Plaza property.
Total Return for the period after tax but before distribution is S$6.6 M, which is S$7.9 M below forecast. There is an unrealised loss of S$6.2 M on the forward hedging contract of the Indonesian Rupiah currency and an unrealised loss of S$3.2 M on the interest rate swap. These are non-cash items and are accounted for in line with FRS 39. However, they have no impact on the cash flow and does not affect the distribution to unitholders. For the 9 months ended 30 September 2008, there is a positive unrealised exchange gain of S$17.7 M, and the interest rate swap an unrealised gain of S$725k.
Adjusting for the total non cash items of S$10.4 M, distribution to unit holders is S$17 M, which is S$1.6 M above forecast, or 11%. This translates into a distribution per unit of 1.60 cent, as compared to the forecast of 1.45 cent.
Period-To-Date PerformanceOverall, distribution to unit holders for the period is S$56.3 M, which is S$2.9 M or 5% above the forecast of S$53.4 M for the same period.
Total gross revenue for the period at S$80.3 M, is S$7.3 M higher than forecast, due mainly to the contribution from the Sun Plaza property which was acquired on 31 March 2008.
Property operating expenses for the period are S$4.4 M. Excluding Sun Plaza, operating expenses are S$4 M, which is S$0.6 M below forecast. This mainly due to lower land rental expenses, lower property management fees and other property operating expenses in the first half of the year.
The higher gross revenue with lower property expenses resulted in the net property income for the period at S$75.9 M, being S$7.5 M higher than forecast, or 11%.
An interest income of S$1.3 M is earned from the surplus of funds placed in deposits with banks for the period. The financial expense of S$4.4 M is mainly the interest cost arising from the S$125 M loan which was drawndown for the acquisition of the Sun Plaza property.
The higher management fee at S$5.9 M, which is S$0.8 M higher than forecast, is due to the additional S$0.4 M fees payable for the Sun Plaza property and the increase of S$0.4 M in the first half year.
Total Return for the period after tax but before distribution for the period is S$242.7 M, which is S$46.8 M above forecast. This is mainly due to revaluation surplus (net of deferred tax) of S$25.8 M on the Sun Plaza property and the other fourteen properties, the unrealised foreign exchange gain of S$17.7 M on the forward hedging contract of the Indonesian Rupiah currency and the unrealised gain of S$0.7 M on the interest rate swap. Adjusting for the total non cash items of S$186.4 M, distribution to unit holders for the period is S$56.3 M, which is S$2.9 M above forecast, or 5%, which translates into a distribution per unit of 5.30 cents, as compared to the forecast of 5.03 cents.
As at 30 September 2008, the gearing is 9.5%. We have a term loan of S$125 M which is repayable after 5 years from 26 March 2008. No debt is to be refinanced within the period up to 26 March 2013.
Commentary
Indonesia's GDP grew 6.4%1 in the first half of 2008, compared to the whole year growth of 6.3% in 2007. Inflation was 11.03% in June 2008, and continued to increase to 12.14%2 in September 2008, driven by higher cost of food, fuel and rising commodity prices. Borrowing rate continues to be high, and the one-month SBI rate (Bank Indonesia certificate) has been increased from 8.75% in June 2008 to 10.39%2 in September 2008.
As at June 2008, the total retail space in Jakarta is 3.1 million square metre. The overall ocupancy rate increased from 85.9% to 87.6% during the second quarter of 20083.
Outlook for 2008The Manager expects that it will be able to meet the projected distribution of 5.84 cents for the year 2008, as stated in the Prospectus.
Note:- Knight Frank First Half 2008 Report
- Bank Indonesia Report
- Jones Lang LaSalle Report-First Quarter 2008
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Click here for 2Q Financial Result