Earnings Commentary: LMIRT’s Indonesian Boost

RELATED QUOTES

SymbolPriceChange
D5IU.SI0.370.00

Being ranked as the fourth most populous nation with over 246 million people, Indonesia has no doubt, been an eye-catching retail market. Lippo Malls Indonesia Retail Trust (LMIRT) is perhaps a testament of the retail potential of this huge domestic market. In its FY12 earnings, the trust reported a relatively robust set of numbers.

The Numbers
Gross rental income for the fourth quarter ended 31 December 2012 grew 35.4 percent as LMIRT begun to reap dividends from its purchase of Pluit Village and Plaza Medan Fair back in 4Q11. To a certain extent, the recent acquisitions of six other properties also helped to boost top line figures.

In particular, LMIRT remained a beneficiary of Indonesia’s growing middle class as shopper traffic increased across its malls. LMIRT reported an occupancy rate of 93.5 percent as at 4Q12, well above Indonesia’s average retail industry rate of 88.1 percent.

Coupled with a recognition of miscellaneous income (derived from gains from litigation and rental of equipment to a third party operating company), LMIRT recorded a 41.5 percent jump in distributable income.

LMIRT’s Sponsor Provides Ready Pipeline
In a phone interview with Bloomberg, PT Lippo Karawaci’s (LMIRT’s sponsor) President Director Ketut Budi Wijaya said that by 2015, PT Lippo plans to have finished building about 15 new malls.

Besides Jakarta, PT Lippo intends to develop malls beyond the capital in a bid to capitalise on the growing middle class. Of the 15 malls it plans to build, half will be located in cities such as Semarang in north Java, Denpasar in Bali and Manado in north Sulawesi province.

Dubbed as a “cornerstone” of PT Lippo’s third pillar of growth, LMIRT has been accorded first-right-of-refusals for PT Lippo’s new malls. With these new malls forming a ready pipeline of possible acquisitions, LMIRT seems well-placed to achieve its stated goal of building a $4 billion portfolio over the next three to five years.

A Sound Footing
Besides having a readily available pipeline of new malls for acquisition, LMIRT also boasts a sturdy balance sheet as well as diversified funding sources.

Even as debt levels increased to about $472.5 million at the end of 2012, LMIRT was still able to maintain a gearing level of around 24.5 percent, below the statutory limit of 35 percent for S-REITs. In addition, LMIRT mentioned in its results press release that it has around $1.1 billion worth of assets which are unencumbered (meaning it can use these assets as collaterals for debt). This provides the trust with financial flexibility in funding.

In sum, these provides a sound footing for LMIRT to take advantage of its sponsor’s pipeline as well as other third party acquisitions.

Looking Forward
The Indonesian government recently announced an increase in minimum wages across Indonesia this year. The highest increases have been planned for the capital, Jakarta – an increase of around 44 percent. The increase in minimum wages could help to propel consumer spending. The latest retail sales figures for Indonesia showed year-on-year growth of around 17 percent in November 2012.

With domestic consumption accounting for around 60 percent of total GDP growth, Indonesia remains isolated from external shocks and thrusts the country to the peak of economic heights in the Southeast Asian region.

The growing sales figures have also provided some impetus for upward rental reversions with the company’s management expecting rentals from most tenants to rise around 5 percent annually.

Inclusive of the recently announced dividends ($0.0074 versus 4Q11’s $0.0053), and based on 13 February’s close of $0.525 apiece, LMIRT’s dividend yield would equate to a respectable 5.6 percent.

Also worthy of note is that the counter has already appreciated 5 percent this year, as of 13 February’s closing price of $0.525, outperforming the broader Straits Times Index’s 4.08 percent appreciation. Perhaps there is still time for the investor to tap into the Indonesian retail market proxy, LMIRT.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • Wall Street opens slightly lower as oil falls Reuters - 4 minutes 42 seconds ago

    REUTERS - U.S. stocks opened slightly lower on Tuesday as weak oil prices weighed on energy stocks amid fading hopes of a deal to limit oversupply. The Dow Jones industrial average was down 16.4 points, ... … More »

  • US stocks fall on lower oil, weak trade forecast AFP - 6 minutes ago

    US stocks opened slightly lower Tuesday with petroleum-linked shares retreating on news suggesting a deal of major producers to limit oil output was less likely. Dow member Chevron lost 0.7 percent and ... … More »

  • Britain's Johnson: Rude poem was not brought up in Turkey
    Britain's Johnson: Rude poem was not brought up in Turkey Associated Press - 8 minutes ago

    Visiting Turkey, British Foreign Secretary Boris Johnson said Tuesday that his hosts had not brought up the controversy caused by a rude poem he composed mocking Turkish President Recep Tayyip Erdogan. ... … More »

  • Saudis, Iran dash hopes for OPEC oil deal in Algeria
    Saudis, Iran dash hopes for OPEC oil deal in Algeria Reuters - 17 minutes ago

    Saudi Arabia and Iran on Tuesday dashed hopes that OPEC oil producers could clinch an output-limiting deal in Algeria this week as sources said the group and non-member Russia were still trying to bridge differences between the kingdom and Tehran. … More »

  • RUBBER-Tokyo futures prices after evening session September 27 Reuters - 22 minutes ago

    Following are prices for Tokyo rubber futures at the end of the Tokyo market's evening session on Sep 2016. Contract Day Volume Evening Volume * Oct 170.0 21 169.2 8 * Nov 164.0 30 163.8 7 * Dec 163.5 ... … More »

  • Wolseley to cut up to 800 jobs in tough British market Reuters - 37 minutes ago

    Wolseley, which makes about 80 percent of its profit in the United States, said the 80 branch closures would take two or three years, resulting in restructuring charges of about 100 million pounds. Half its shareholders are UK investors. … More »

  • US home prices rose modestly in July Associated Press - 47 minutes ago

    U.S. home prices rose modestly in July, pulled up by strong gains in Portland, Seattle and Denver, a private index says. The Standard & Poor's CoreLogic Case-Shiller 20-city home price index rose 5.1 percent ... … More »

  • Global markets - Europe's bank angst sours U.S. debate rally
    Global markets - Europe's bank angst sours U.S. debate rally Reuters - 53 minutes ago

    Worries about Europe's banks wrenched stocks into reverse on Tuesday and halted a surge in Mexico's peso that followed Democrat Hillary Clinton's victory over Republican Donald Trump in the first U.S. presidential debate. Europe's mood soured as … More »

  • Europe's bank angst sours U.S. debate rally
    Europe's bank angst sours U.S. debate rally Reuters - 56 minutes ago

    Worries about Europe's banks wrenched stocks into reverse on Tuesday and halted a surge in Mexico's peso that followed Democrat Hillary Clinton's victory over Republican Donald Trump in the first U.S. presidential debate. Europe's mood soured as … More »

  • Philippines suspends 20 mines for environmental violations Associated Press - 1 hour 2 minutes ago

    Philippine officials on Tuesday recommended the suspension of 20 more mines, mostly nickel producers, for environmental violations, threatening to tighten supply from the world's top nickel ore exporter. ... … More »

  • 'Operational upset' at Shell's Bukom site - spokeswoman Reuters - 1 hour 13 minutes ago

    SINGAPORE/OSLO (Reuters) - An incident at Royal Dutch Shell's (RDSa.L) manufacturing site at Pulau Bukom in Singapore on Tuesday resulted in flaring with dark smoke at one unit but it has since subsided, a spokeswoman said. Shell declined to give … More »

  • European stocks falter amid Deutsche Bank, trade worries
    European stocks falter amid Deutsche Bank, trade worries Associated Press - 1 hour 17 minutes ago

    European stocks faltered Tuesday as investors worried over Deutsche Bank's outlook, a big decline in oil prices and a sharp downgrade in global trade predictions. The reaction in markets to the first U.S. ... … More »

  • Goldman Sachs' top Southeast Asia investment banker to leave-sources Reuters - 1 hour 19 minutes ago

    The head of Goldman Sachs' investment banking division in Southeast Asia, Michael Smith, is set to leave the bank, two people familiar with the matter said on Tuesday. Based in Singapore, Smith is a partner at Goldman and also heads the bank's … More »

  • Britain's first U.S. shale gas delivery arrives in stormy Scotland Reuters - 1 hour 40 minutes ago

    Britain's first shale gas delivery from the United States sailed into a heated European political debate on fracking on Tuesday and immediately ran into its first practical problem - the Scottish weather. The huge "Ineos Insight" tanker had entered … More »

  • Shell: Fire forces closure of key oil pipeline in Nigeria Associated Press - 1 hour 42 minutes ago

    Shell says a fire has forced it to close a key oil pipeline feeding Nigeria's strategic Bonny Export Terminal, which militants attacked last week. The ongoing challenges are losing oil multinationals billions ... … More »

  • NATO says Aleppo attacks 'blatant violation of international law'
    NATO says Aleppo attacks 'blatant violation of international law' AFP News - 1 hour 50 minutes ago

    NATO head Jens Stoltenberg said Tuesday the "morally totally unacceptable" bombardment of the Syrian city of Aleppo broke international law, and urged Russia to take genuine steps to restore a ceasefire. "The appalling attacks on Aleppo have shaken … More »

  • StanChart refers alleged corruption at Indonesian firm to authorities
    StanChart refers alleged corruption at Indonesian firm to authorities Reuters - 1 hour 52 minutes ago

    Standard Chartered (STAN.L) has referred allegations of impropriety at an Indonesian power company that the bank's private equity arm invested in to the appropriate authorities, the bank said on Tuesday. The Wall Street Journal earlier reported the … More »

  • Turkey dismisses 87 spy agency staff over failed coup
    Turkey dismisses 87 spy agency staff over failed coup AFP News - 1 hour 53 minutes ago

    Turkey has dismissed 87 staff from its spy agency over alleged links to the failed July 15 coup, state media said Tuesday, in the first purge of one of the country's most powerful institutions. National Intelligence Organisation (MIT) has suspended … More »

  • Oil prices slip as hopes for a deal in Algiers fade
    Oil prices slip as hopes for a deal in Algiers fade Reuters - 2 hours 10 minutes ago

    Crude oil futures fell on Tuesday as optimism faded for an output-limiting deal from an oil producer meeting in Algeria that has so far failed to yield any agreement to curb one of the worst supply gluts in history. Saudi Arabia on Tuesday dashed … More »

  • AOL chief Tim Armstrong on the ‘concerning’ Yahoo hack and how he’s convincing workers not to leave post-acquisition
    AOL chief Tim Armstrong on the ‘concerning’ Yahoo hack and how he’s convincing workers not to leave post-acquisition Business Insider - 2 hours 13 minutes ago

    John Lamparski/Getty Images AOL chief executive Tim Armstrong … Continued The post AOL chief Tim Armstrong on the ‘concerning’ Yahoo hack and how he’s convincing workers not to leave post-acquisition appeared first on Business Insider. … More »

  • German companies share success stories of their Malaysian ventures Business Times - 2 hours 15 minutes ago

    BERLIN: German companies have given the thumbs-up to the incentives rolled out by Malaysia, saying they have provided support to their investment story abroad. Jan J.Schmidt-Krayer, who is managing partner of Schmidt + Clemens, said the tax … More »

  • Germany blocks WhatsApp data transfers to Facebook AFP - 2 hours 17 minutes ago

    German data protection authorities on Tuesday said they had blocked Facebook from collecting subscriber data from its subsidiary WhatsApp, citing privacy concerns. Facebook and WhatsApp promised in the ... … More »

  • WTO cuts 2016 world trade growth forecast to 1.7 percent, cites wake-up call
    WTO cuts 2016 world trade growth forecast to 1.7 percent, cites wake-up call Reuters - 2 hours 18 minutes ago

    The World Trade Organization cut its forecast for global trade growth this year by more than a third on Tuesday, reflecting a slowdown in China and falling levels of imports into the United States. The new figure of 1.7 percent, down from the WTO's … More »

  • Schaeuble stirs interest rates debate ahead of Draghi visit
    Schaeuble stirs interest rates debate ahead of Draghi visit Reuters - 2 hours 22 minutes ago

    German Finance Minister Wolfgang Schaeuble called on Tuesday for urgent structural reforms to spur growth to end the era of low interest rates, a day before lawmakers will grill ECB President Mario Draghi about his loose monetary policy. In a guest … More »

  • Singapore urged to get tougher on money-laundering
    Singapore urged to get tougher on money-laundering AFP News - 2 hours 23 minutes ago

    Singapore must take more aggressive action against complex cross-border money-laundering including prosecuting individuals and seizing illicit proceeds, a global financial crimes watchdog said Tuesday. The Paris-based Financial Action Task Force … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.141+0.003+2.17%
    N21.SI
    3.99+0.03+0.76%
    Z74.SI
    0.155+0.003+1.97%
    AFC.SI
    0.740.000.00%
    BS6.SI
    0.275+0.010+3.77%
    5ME.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.133+0.020+17.70%
    5PF.SI
    0.19+0.03+15.85%
    AWI.SI
    1.48+0.16+12.12%
    S91.SI
    0.198+0.020+11.24%
    M14.SI
    0.60+0.05+9.09%
    AZA.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.255-0.110-30.14%
    AZT.SI
    0.56-0.18-24.32%
    5VJ.SI
    0.395-0.070-15.05%
    K1Q.SI
    0.162-0.028-14.74%
    BGO.SI
    0.122-0.020-14.08%
    569.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3599-0.0003-0.02%
    USDSGD=X
    1.5254-0.0049-0.32%
    EURSGD=X
    1.7648+0.002+0.11%
    GBPSGD=X
    73.8020+0.078+0.11%
    SGDJPY=X
    5.6998+0.0005+0.01%
    SGDHKD=X
    3.0319-0.0023-0.08%
    SGDMYR=X
    9,524.7754-54.0469-0.56%
    SGDIDR=X
    4.9027+0.0009+0.02%
    SGDCNY=X
    1.0413+0.0027+0.26%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,332.60-11.50-0.86%
    GCZ16.CMX
    19.27-0.32-1.64%
    SIZ16.CMX
    92.93-1.53-1.61%
    ^XAU
    2.17-0.03-1.27%
    HGZ16.CMX
    43.85+0.41+0.94%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.10-0.03
    ^FVX
    1.55-0.04
    ^TNX
    2.28-0.05
    ^TYX