EC World REIT 3QFY2025 Financial Analysis
EC World REIT has released its financial results for the third quarter of fiscal year 2025. The report reflects a period of significant transition for the trust, marked by a sharp decline in revenue and profits, restructuring of debt, and ongoing challenges relating to distributions. Below is a detailed analysis of the financial performance, portfolio updates, and capital management for the quarter.
Key Financial Metrics and Performance Comparison
| Metric |
3QFY2025 |
2QFY2025 |
3QFY2024 |
YoY Change |
QoQ Change |
| Gross Revenue (S\$’000) |
10,803 |
9,885 |
25,081 |
-56.9% |
+9.3% |
| Net Property Income (S\$’000) |
9,000 |
7,938 |
22,807 |
-60.5% |
+13.4% |
| Finance Cost (S\$’000) |
(11,462) |
(10,378) |
(14,375) |
-20.3% |
+10.4% |
| Income Tax Expense/Credit (S\$’000) |
(1,050) |
25,084 |
(4,513) |
-76.7% |
N/M |
| Total Amount Available for Distribution (S\$’000) |
– |
– |
3,611 |
N/M |
N/M |
| Distribution Per Unit (Singapore cents) |
– |
– |
0.401 |
N/M |
N/M |
Dividend and Distribution Update
There will be no distribution for 3QFY2025, nor is any expected for the full year 2025. This follows a series of deferred and withheld distributions in previous periods due to insufficient funds and restrictions imposed by offshore facility agreements. The manager has stated it is highly likely that no distribution will be declared for the financial year 2025.
Balance Sheet Highlights
| Metric |
30 Sep 2025 |
31 Dec 2024 |
Change |
| Cash and Cash Equivalents (S\$’000) |
6,302 |
4,513 |
+39.6% |
| Investment Properties (S\$’000) |
576,785 |
713,726 |
-19.2% |
| Total Assets (S\$’000) |
692,051 |
887,079 |
-22.0% |
| Borrowings (S\$’000) |
472,223 |
480,382 |
-1.7% |
| Total Liabilities (S\$’000) |
770,165 |
855,016 |
-9.9% |
| Net Assets Attributable to Unitholders (S\$’000) |
(78,114) |
32,063 |
N/A (Negative Equity) |
| NAV per Unit (S\$) |
(0.10) |
0.04 |
N/A |
Capital and Debt Structure
- Aggregate leverage has increased to 71.1% (from 56.5% at end-2024), well above typical REIT limits. The manager notes this is due to circumstances beyond their control.
- Weighted average debt maturity is extremely short at 0.16 years, indicating refinancing risk.
- Interest coverage ratio has dropped to 0.75x (from 1.64x), signaling pressure on cash flows.
- Running interest rates remain high (Aggregate: 8.8% p.a., Offshore: 10.0% p.a., Onshore: 5.7% p.a.).
- Pre-enforcement notice received from offshore lenders; deadline for asset divestments to cover loans passed, but lenders have not yet accelerated repayment.
Portfolio Update
- Average committed occupancy across the portfolio is 84.3%.
- Major assets include Chongxian Port Investment (92.2% occupancy), Chongxian Port Logistics (94.1%), and Hengde Logistics (89.5%).
- WALE stands at 1.2 years (net lettable area), and 0.9 years (gross rental income), indicating a near-term expiry profile.
Exceptional Earnings and Asset Revaluation
- Significant fair value losses on investment properties have occurred, contributing to declining net asset values and a negative equity position.
- Income tax credits reflect reversal of deferred tax expenses due to these fair value losses.
Historical Performance Trends
- Gross revenue and NPI have declined by over 56% and 60% year-on-year, respectively, mainly due to termination of master leases and lower contributions from underlying leases.
- Quarter-on-quarter, there was a modest uptick in revenue and NPI (9.3% and 13.4%, respectively), but the numbers remain depressed relative to prior years.
Events Impacting Performance
- Termination of master lease agreements upon expiry has been a major driver of lost income.
- Restructuring of debt and ongoing discussions with lenders may result in asset divestments.
- No known major legal disputes or natural disasters disclosed.
- No distributions declared for FY2025 due to lack of available funds and loan covenants.
Outlook and Manager’s Statement
The tone of the manager’s communications is cautious and defensive, acknowledging ongoing challenges with cash flow, distributions, and refinancing. There is no explicit Chairman’s Statement included in the report.
Conclusion and Investment Recommendation
Overall, the financial performance and outlook for EC World REIT appear weak. The trust is facing severe headwinds: substantial drops in revenue and income, heavy leverage, short debt maturities, high interest rates, and a negative net asset value. The lack of distributions and uncertainty around refinancing or asset sales further cloud the outlook.
- If you are currently holding this stock: Consider reducing exposure or exiting your position, especially if your investment thesis was based on income stability or capital preservation. The risks are elevated given the current balance sheet distress and lack of distributions.
- If you are not currently holding this stock: There is little reason to initiate a position at this time. Wait for clear signs of recovery, successful refinancing, asset divestment, or improved fundamentals before considering entry.
Disclaimer: This analysis is based solely on information provided in the EC World REIT 3QFY2025 report and does not constitute personalized financial advice. Investors should consider their own financial circumstances and consult with a professional advisor before making investment decisions.
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