Lippo Malls Indonesia Retail Trust (LMIR Trust) reported a dismal set of 1Q14 results, with gross revenue falling 14.5% YoY to S$33.7m and NPI down 16.6% to S$31.1m. The soft performance was mainly due to the loss of rental guarantee income from Pluit Village and a 15.8% depreciation of IDR against SGD.

While we note that underlying portfolio performance has been encouraging, with gross rental income in IDR terms growing 6.3% YoY and portfolio occupancy improving 1.8ppt to 95.6%, DPU for the quarter missed both ours and the street’s expectations. Specifically, DPU eased 23.6% YoY to 0.68 S cents, meeting only 18.7%/21.3% of our/consensus FY14 DPU forecasts. We will be participating in the analyst briefing later in the morning to get more details on its outlook. For now, we place our Hold rating and S$0.39 fair value UNDER REVIEW.

Source: OCBC Research - 6 May 2014