EC World REIT has reported a distribution per unit (DPU) of 1.383 cents in the 1QFY2022 ended March, 9.7% lower than the DPU of 1.532 cents in the same period before.
During the quarter, the REIT’s revenue rose 4.4% y-o-y to $32.2 million, which is mainly due to the stronger RMB, as well as organic rental escalation and late fee income.
Net property income (NPI) grew 7.4% y-o-y to $29.7 million due to lower property expenses.
Distribution to unitholders fell 9.4% y-o-y to $11.2 million. This was due to the withholding of tax expense incurred for repatriation of funds and provision for the pre-termination compensation to the REIT’s third-party tenant at Fu Zhuo Industrial as a result of the compulsory expropriation.
Based on 30% of the compensation package received in 1QFY2022, ECW has recognised 30% of the pre-termination compensation for distribution purposes in the quarter. The balance of the provision will be recognised upon the receipt of the rest of the compensation package.
As at end-March, the REIT has a portfolio occupancy of 98.6% with a weighted average lease expiry (WALE) of 2.4 years by gross rental income (GRI).
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The REIT’s aggregate leverage stood at 37.3% as at end-March.
“As countries seek normalcy in a post-pandemic world, discrepancies in fundamentals persist. The pandemic has caused major disruptions in global supply chain with shutdown of industries, causing lower consumer demand and reduced industrial activity globally. The recent Covid lockdowns in China caused new bottlenecks in global supply chains and threaten to undermine economic growth with lower consumer spending and higher unemployment,” says Goh Toh Sim, executive director and CEO of the manager.
He adds: “While EC World REIT’s portfolio of properties has not been materially impacted by the recent lockdowns, we are monitoring the situation in Hangzhou closely. Headwinds persist domestically and globally. We are currently in the final stages of refinancing EC World REIT’s loans due in mid-2022 and expect the refinancing to be completed before the loans’ expiries.”
Units in EC World REIT closed 1 cent lower or 1.59% down at 62 cents on May 12.
