LMIR: 3Q 2012 DPU 0.73c.

A reader sent me an email and asked if I would be writing about LMIR's 3Q 2012 results. I admit that I was wondering if I should just skip it this time.

LMIR announced a DPU of 0.73c which is lower than the 0.79c declared in 2Q 2012. This is despite the fact the distributable income improved 37.9%, year on year.

In my blog post on the REIT's 2Q 2012 results, I was optimistic that the REIT's DPU would improve further as its gearing of 9.3% meant that it had plenty of debt headroom for yield accretive purchases. However, the management has squandered the enviable low gearing level as a slew of recent acquisitions were DPU dilutive in nature. Post rights, I estimated a DPU of 0.815c and it does not look like it is going to happen anytime soon.

Unless unitholders were active in acquiring nil-paid rights as they were sold down to 2.1c, I believe we were better off pre-rights compared to post-rights. Pre-rights, we were enjoying quarterly DPU in excess of 1c and unit price was very much the same level as it is now. Those of us who bought into the nil-paid rights cheaply would have made capital gains of between 20+% to 40+% in less than a year, excluding income distributions received in the same period. Those who did not do so are not any better off.

Only time will tell us the quality of a REIT's management and LMIR's has disappointed so far.

See 3Q 2012 financial statements: here.

Related posts:
1. LMIR: 2Q 2012 DPU 0.79c.
2. LMIR: More acquisitions and lesser DPU again.
3. LMIR: More benefits from acquiring 4 malls?