LOTTE REIT Co Ltd (330590.KS) Q3 2024 Earnings Report

LOTTE REIT delivered solid operating performance in QQ3 2024, driven by resilient rental income and strong margin retention, despite a challenging external funding environment. Revenue reached KRW 30.87 billion for the quarter, up 4.72% year over year (YoY) and 2.37% quarter over quarter (QoQ), while gross profit rose to KRW 19.71 billion with a gross margin of 63.86%. EBITDA stood at KRW 29.15 billion, producing an EBITDA margin of 94.41% and supporting an operating income of KRW 19.53 billion (operating margin 63.26%). Net income for QQ3 2024 was KRW 4.53 billion, a substantial 240.8% YoY increase and 39.8% QoQ, reflecting strong core earnings alongside notable non-operating expense headwinds.

The quarter carried meaningful non-operating charges totaling roughly KRW 15.00 billion (total other income/expenses net), which netted against the robust operating performance to yield the reported net income. As a result, cash flow from operations was robust at KRW 30.66 billion, and free cash flow matched this level at KRW 30.66 billion, underscoring the quality of the REIT’s recurring cash generation. Net debt remained elevated at approximately KRW 1,456.40 billion, with total liabilities around KRW 1,607.29 billion and equity near KRW 1,017.58 billion, yielding a debt-to-capitalization profile consistent with a moderately levered balance sheet (total debt to capitalization about 59%). Management commentary on QQ3 2024 emphasizes continued focus on asset quality and sustainable cash flow, though explicit forward guidance was not disclosed in the provided dataset.

Key takeaways for investors: (1) The portfolio delivered stable cash generation with high operating margins, (2) Net income benefited from strong operating contributions but remained sensitive to non-operating charges, (3) FFO/FCF generation supports ongoing dividend capacity and balance sheet resilience, and (4) leverage remains a key consideration given debt levels and refinancing risk in a rising-rate environment. The stock trades at a discount to book value (P/B roughly 0.88) with a dividend yield around 2.8%, positioning LOTTE REIT as a defensively oriented retail REIT with upside if occupancy, rental escalations, and refinancing conditions improve.