Lippo Malls Posts 18.5% Growth In Distributable Income
The manager of Lippo Malls Indonesia Retail Trust (LMIR) announced on 30 April 2012 that the trust had put in record gross revenue of $45.6 million for the first quarter of 2012. The figure represents a 39 percent jump over the corresponding quarter in 2011 of $32.8 million. LMIR’s manager attributed the jump to the first full quarter contributions from Pluit Village and Plaza Medan Fair – recently acquired in late 2011. In line with the higher gross revenue, distributable income also increased, albeit by a smaller percentage of 18.5 percent. One-time costs of approximately $1.7 million associated with refinancing and acquisition activities had pared some revenue growth. LMIR’s manager also announced a distribution per unit of $0.0069 for 1Q12. This would translate into an annualised distribution yield of around 6.9 percent, based on its closing price of $0.40 per unit on 31 March 2012.
Significance: LMIR has a prudent gearing level of only 9.2 percent with no refinancing required until June 2014. It also has financial flexibility to fuel its future growth with around $884 million worth of unencumbered funds.
IndoAgri Posts 18.1% Drop In Earnings Despite Revenue Growth
Indonesia-based Indofood Agri Resources (IndoAgri), achieved revenue growth of 9.3 percent in 1Q12 as it sought to benefit from higher demand of edible oil products. However, the revenue growth was offset by lower profit contribution from its plantation division as earnings fell 18.1 percent to Rp601 billion ($52 million). The lower profit contribution was a reflection of the combined effects of lower average selling prices of palm products and rubber, the higher costs of production and higher purchases of fresh fruit bunches (FFB). Chief executive officer, Mark Wakeford said that the company had achieved positive growth for production with total FFB and crude palm oil (CPO) growing 12 percent and 8 percent year-on-year to 885,000 tonnes and 190,000 tonnes respectively. Wakeford mentioned that the company’s new Jarkarta refinery had provided support for stronger demand and increased production capacity as its edible oil business grew 15 percent.
Significance: IndoAgri is cautiously optimistic that commodity prices will hold firm as positive fundamentals provide support for its key markets such as CPO, rubber and sugar. The company also boasts strong cash levels of $875 million which could fuel its plans to pursue new business opportunities.
Soup To Expand Overseas With Dian Xiao Er Divestment
Soup Restaurant Group (SRG) is expected to sign a settlement agreement on 9 May 2012 to divest its stake in Dian Xiao Er (DXE). SRG is expected to stomach about $7.9 million from the sale of its 50.98 percent stake in YES F&B – which owns DXE. With the sale of DXE, SRG is expected to brace itself for a drop in revenue as revenue from YES had made up about 43 percent of SRG’s revenue and about 28 percent of earnings. In order to cement a bulwark against this revenue erosion, SRG intends to open branches outside of Singapore and plans to export its sauces to Japan, Taiwan, Hong Kong and China markets. SRG had opened its first Malaysian outlet in November 2011 which marked its first foray into the regional market. The firm said that its maiden outlet in Malaysia has seen reasonable success and aims to continue to expand in Kuala Lumpur with the employment of a country manager in Malaysia.
Significance: SRG mentioned that if the settlement agreement is successful, it intends to either distribute the proceeds through a special dividend, or use the proceeds to fund its regional expansion or a combination of both options.