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LMIR has increased distributable income, giving a distribution per unit (DPU) of 0.79c in 2Q 2012, payable on 30 August 2012. This an improvement over the DPU of 0.69c in 1Q 2012. Having said this, it is still lower than the 0.815c I estimated, post rights.
LMIR has a gearing level of 9.3% (9.2% in 1Q 2012) and its interest cover ratio is 11.4x (13.3x in 1Q 2012). There is plenty of debt headroom and I still believe that growth through further acquisitions is likely to be funded fully by debt and we could see DPU improving by a fair amount.
Indonesia remains a growth story with domestic consumption forming some 60% of its GDP. The demand for quality retail space is growing over time.
LMIR remains a bullet proof REIT with a strong balance sheet. However, whether it could deliver meaningfully higher DPU depends on its management which seems slow to act and has, in my opinion, under-delivered, post rights.
Would at I buy at current prices? No.
See slides presentation: here.
Related post:
LMIR: 1Q 2012 DPU 0.69c.
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7 comments:
It's very hard to look for good dividend yield stock now.
I've been searching for the right one these days.
B
Hi Ak71,
I have a small holding on this. But current prices are too high compared to historic prices. Seems like there is a possible chance of a correction judging from the graph. :D
Hi B,
Indeed. Mr. Market has been buying up counters with good dividend yields.
Hi INVS 2.0,
Yup. Does seem quite probable, doesn't it?
This is the first time I have attached a chart without saying much.
Well, for people who would like to buy into this stock, let us hope that Mr. Market won't be perverse here, unpredictable the way he is. ;p
Indonesia on Monday said its economy grew a faster-than-expected 6.4 percent in the second quarter from a year ago, buoyed by robust domestic demand and investment.
Private consumption increased five percent year-on-year, government spending rose seven percent, while investment climbed 12.3 percent, said Suryamin, the head of the Central Statistics Agency...
Experts say domestic demand has made the nation of 240 million people with a growing middle class broadly resilient to the global economic slump and eurozone debt crisis that have hit other Asian nations.
AFP, 6 August 2012.
So, my hunch about the run up of the prices means something is brewing.
http://lmir.listedcompany.com/news.html/id/321803
They just bought something 5 - 13% below market valuation. Hopefully, it adds more to the bottom line and yield payout.
Hi SnOOpy168,
This is fast.
I have taken a look at the announcement. Unfortunately, no mention is made about any DPU accretion. In fact, the DPU is expected to reduce further.
The management will, of course, still be rewarded for "enhancing" the earnings of the REIT.
PROPOSED ACQUISITIONS - PEJATEN VILLAGE AND BINJAI SUPERMALL.
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