EC World REIT has reported a calculated distribution per unit (DPU) of 0.916 cents for the 3QFY2023 ended Sept 30, 32.8% lower y-o-y. Calculated DPU for the 9MFY2023 stood at 2.969 cents, 28.2% lower y-o-y
Calculated distributable income for the 3QFY2023 fell by 32.9% y-o-y to $7.4 million due mainly to the weakening of the renminbi (RMB) against the Singapore dollar (SGD). The higher finance costs, which increased by 10.8% y-o-y, as well as assumed retention also contributed to the decline. This was offset by the organic rental escalations built-in in existing leases.
3QFY2023 gross revenue fell by 9.5% y-o-y to $27.0 million while net property income (NPI) fell by 8.5% y-o-y to $24.7 million.
According to the REIT, its overdue rent receivables have exceeded RMB171 million ($31.8 million) as at Sept 30, which poses a “serious issue” to meet its obligations.
Of the outstanding rent receivables, RMB126 million represents the rent payable under the master leases between the sponsor and the EC World Group. The remaining RMB45 million is for the rent payable by the other subsidiaries of the group.
“The EC World Group will monitor the collection status of the outstanding rent receivables and provide provision on a needed basis,” says the REIT in its Nov 7 statement.
Further to its update, the REIT announced that the valuation of its investment properties is likely to be adversely impacted from the current carrying values on the back of the receivable collection status of its assets and the latest market conditions in China.
“Management is in the process of seeking advice on the valuations and carrying out an updated valuation exercise and will provide further update on the valuations in due course,” it says.
As at Sept 30, the REIT’s gearing stood at 36.9% although that is expected to increase materially due to the expected change in the valuation of its properties.
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Portfolio occupancy for the period remained at 97.4% while weighted average lease to expiry (WALE) stood at 1.0 year and 0.8 years by gross rental income (GRI) and net lettable area (NLA).
As at Sept 30, EC World has onshore bank loans of RMB735.2 million and offshore bank loans of $349.8 million outstanding.
Units in EC World REIT last traded at 28 cents before it called for a voluntary trading suspension in August.
