SINGAPORE (THE BUSINESS TIMES) – Dasin Retail Trust (DRT) said its business fundamentals are “reasonably sound” throughout the protracted Covid-19 crisis, and expects to generate sufficient cashflow to meet working capital needs.
It gave its response on Monday (Aug 16) to several queries from the Singapore Exchange (SGX), in relation to the group’s “significant” current liabilities of $557.2 million and cash and bank balance of only $123.98 million for the first half ended June 30.
DRT said the current liabilities were mainly due to the re-classification of $242 million and US$134.29 million (S$182 million) offshore syndicated term loan equivalent to $422.66 million in aggregate of the group, and 375.15 million yuan (S$78,143,000) onshore syndicated term loan of the group, which are due and payable on Dec 19, 2021.
The group is in “active negotiations” with the lenders and believes the refinancing of the term loans is achievable within the stipulated timeframes, based on indicative terms discussed with the lenders.
In considering its payment obligations in the next 12 months, DRT said it has sufficient cash and cash equivalents; and expects that adequate cashflow will be generated from its operations to meet working capital needs.
It recorded net cash of $21.7 million from its operating activities in first-half 2021.
In response to a separate SGX query, DRT said its concentration of credit risk is limited, given that it has many varied tenants and a credit policy of obtaining security deposits from tenants for the lease of its units.
It posted $23.7 million in current trade and other receivables in the first half of 2021, an increase from $20.3 million in the full year ended Dec 31, 2020.
Net trade receivables amounted to around $8.36 million, mainly from tenants that have good credit records with the group, said the group.
It had recognised impairment loss allowance for expected credit losses (ECLs) amounting to $3.7 million in the first half of 2021, in accordance with IFRS 9 Financial Instruments.
In doing so, DRT noted that it uses historical credit loss experience and adjusts for current conditions and forward-looking factors specific to the debtors and the economic environment, so as to determine the overall allowance for ECL.
Included in other receivables of $14.08 million in first-half 2021 was a recoverable net input value-added tax of approximately $13.014 million.
In addition, non-current other receivables of $467,000 relate to a 10-year finance lease receivable from a tenant.
The group said it has assessed the recoverability of the non-current other receivable and current trade and other receivables under IFRS 9; it believes the impairment loss allowance for ECLs has been adequately provided for as at June 30, 2021.
In another regulatory query on DRT’s “significant” trade and other payables of $33.55 million in first-half 2021, the group said included in other payables was a construction cost payable to a third party of around $5.86 million – unsecured with fixed interest rate of 4.35 per cent per annum, repayable within the next 12 months.
Its total trade and other payables as at first-half 2021 are not due for payment, and will be settled in accordance with relevant commercial terms varying from within 30 to over 90 days from June 30, 2021.
Accrued interest payables are settled on the interest payment due date.
“The board is continuously monitoring the group’s operations, and receives reports from management in relation to the group’s performance and financial status; and nothing material has come to the board’s attention that warrants further disclosure to unitholders,” it said.