LOTTE REIT Co Ltd (330590.KS) Q1 2025 Earnings Report

Q1 2025 (quarter ended 2025-03-31) delivered a revenue of KRW 35.20 billion and a robust gross margin of approximately 66.65%, underscoring LOTTE REIT’s core rent-backed cash flow profile. Reported net income of KRW 8.47 billion reflects a strong operating base but is dampened by substantial other expenses and financing costs. Management benefits from a high EBITDA margin (reported EBITDARatio of 0.956) driven by disciplined operating expenses and the stable rent base typical of a diversified REIT with long-term lease infrastructure. YoY revenue growth of 17.93% and a QoQ rise of 1.28% point to continued demand resilience and favorable rental dynamics in QQ1 2025, even as funding costs weigh on pretax profitability.

However, the quarter also features a material drag from financing and other non-operating items: total other income/expenses net amounted to KRW -14.16 billion and interest expense stood at KRW 15.25 billion, resulting in an income before tax of KRW 8.47 billion and a net income of KRW 8.47 billion. Interest coverage sits at approximately 1.48x, signaling sensitivity to rising rates and debt service costs. Cash flow reveals operating cash flow of KRW 16.69 billion and free cash flow of KRW 16.69 billion, with a sizable cash dividend outflow of KRW 32.36 billion and financing cash outflows of KRW 32.36 billion, underscoring an aggressive capital return posture relative to quarterly cash generation.

On the balance sheet, LOTTE REIT maintains solid liquidity with cash and equivalents of KRW 7.59 billion and total debt around KRW 1.308 trillion against total assets of KRW 2.598 trillion. The company shows a leveraged profile (Debt/Equity ~1.14; Debt to capitalization ~0.533), while retained earnings are negative at KRW 178.45 billion, signaling accumulated losses since inception offset by substantial shareholder equity (KRW 1.1456 trillion). In valuation terms, price-to-book stands at ~0.89x and price-to-earnings at ~30x, with a dividend yield of ~3.18% in this period. Investors should monitor leverage dynamics, capex plans, and rent roll resilience as macro conditions evolve.