LIPPO Malls Indonesia Retail Trust (LMIRT) posted a 6 per cent drop in net property income (NPI) to S$30.6 million for its third quarter ended September, from S$32.8 million in the corresponding year-ago period.

Gross revenue slipped 3.8 per cent to S$49.8 million for the quarter, from S$51.7 million a year ago. Rental revenue also dipped 6.2 per cent to S$28.1 million from S$29.9 million.

In a bourse filing on Thursday (Nov 9), the manager of LMIRT attributed these declines to the rupiah’s 5.8 per cent year-on-year currency depreciation against the Singapore dollar, as well as lower rental contributions of S$0.7 million from Lippo Plaza Jogja, a shopping centre in Indonesia.

This lower rental contribution was due to the expiry of master leases in December 2022, the manager added.

No distribution will be paid to holders of its S$140 million and S$120 million perpetual securities, as the trust had announced earlier this year.

For the nine months ended September, NPI was down 4.9 per cent to S$93.8 million, as compared to S$98.7 million for the same period a year ago. Gross revenue was down 3.2 per cent to S$149.4 million, while rental revenue came in 7.2 per cent lower at S$84.1 million.

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Meanwhile, the trust’s portfolio occupancy declined to 76.8 per cent for the quarter, down from 81.4 per cent recorded in the previous quarter ended Jun 30, 2023.

This was mainly due to the early termination and downsizing of Carrefour anchor leases in shopping malls Palembang Square, Tamini Square and Lippo Plaza Kramat Jati, said LMIRT’s manager. It added that initiatives have been taken to convert these vacated spaces to cater to mini-anchor or speciality tenants.

As at end-September, its gearing ratio stood at 43 per cent, with interest coverage at 1.97 times on higher year-on-year interest expenses.

James Liew, chief executive officer of the manager, noted that the trust has secured support from its existing relationship lenders to extend its maturing loans.

Last month, the trust announced that it had entered into amendment and restatement agreements. This was in respect of its two loan facilities of S$67.5 million, with each maturing on Nov 9, 2023. In addition, it has another S$110 million loan facility – S$82.5 million would be maturing on Jan 6, 2024, while the remaining S$27.5 million would be maturing on Jan 6, 2026.

These loan facilities were extended with effect from Nov 3, 2023 with a final maturity on Nov 2, 2026 following the upfront prepayment of S$47 million. Certain properties have been provided as collateral to the lenders of these agreements.

These extensions come as the trust continues to “exercise prudence” in its capital management, by conserving cash to stabilise its performance in a “challenging high interest rate and depreciating IDR environment, exacerbated by geopolitical tensions and subdued global and domestic economy”.

“Despite the successful extension of the loans in 2023, given the challenges outlined above, distributions to both the perpetual securities holders and unitholders will unfortunately remain constrained until a comprehensive solution is determined for the trust’s maturing debts in 2024,” said Liew.

Units of LMIRT closed at S$0.023 on Thursday, up S$0.001 or 4.6 per cent, before the results release.