OUE Lippo Healthcare warns of H1 loss

OUE Lippo Healthcare expects to report a net loss for the six months ended June 30, 2020, mainly due to the impact of the global Covid-19 pandemic on its equity-accounted investees.

The profit warning, issued on Tuesday night, was based on a preliminary assessment of the group's unaudited financial results for the half-year period.

OUE Lippo Healthcare's profit warning follows a profit guidance issued by the manager of First Real Estate Investment Trust (First Reit) on Monday. The manager is an associated company of OUE Lippo Healthcare.

First Reit's manager said it is expecting a 40 per cent to 50 per cent drop in the Reit's available income to unitholders for the six months ended June 30, 2020. Distribution per unit is expected to fall 40 per cent to 50 per cent from 4.3 Singapore cents recorded a year ago.

Total return after tax for H1 2020 is expected to decline by 50 to 60 per cent from S$30.9 million previously.

First Reit's expected drop in earnings comes amid an extension of two months' rental relief for May and June to all its tenants in Singapore, Indonesia and South Korea to alleviate the economic distress caused by Covid-19 pandemic. The relief tab will come to S$19.6 million.

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As at Dec 31, 2019, OUE Lippo Healthcare's ownership interest in First Reit stood at 13.8 per cent, based on its 2019 annual report. First Reit is material to the group and is equity accounted.

The group's share of results of equity-accounted investees net of tax was S$7.3 million as at the same date.

Shares of Catalist-listed OUE Lippo Healthcare closed at 3.8 Singapore cents on Tuesday, down 0.4 cent or 9.5 per cent, before the announcement.