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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Hi, morning, everyone. Sabrina here. On behalf of EC World REIT, thank you for dialing in to the briefing for the first quarter ended 31st March 2021. With me here today, we have both Toh Sim, the CEO and Executive Director of the REIT Manager; and Wang Feng, who is the CFO of the Manager.
As per previous briefing, Toh Sim will start off giving a brief presentation. Also Wang Feng will take over the financials and take over the asset management at the end of the briefing. Then after we will open the floor to Q&A. Over to you, Toh Sim.
Good morning, ladies and gentlemen. Thank you for your time with us this morning. I'm going to talk about our 1Q FY 2021 results. First is the [indiscernible]. Year-on-year, the number is very high. That's because of last year, 1Q 2020, we gave half a year of -- half a month of rental rebate. So it resulted in the very low DPU in [ March ] of 2020.
In 1Q 2021, in addition to the 90% of DPU, the strengthening of RMB is also a key factor because in last quarter, the RMB was -- SGD 1 was about 4.9495. And that in 1Q, end of 1Q was around -- 4.8485. So that strengthening of RMB has resulted in a higher DPU.
We continue to maintain the 10% as the Board wants to keep this consistent policy issue, 90%. One main reason is still the worldwide pandemic situation has not improved. And even Singapore, we have run into phase 2. So as a consistent policy from last year, where we started because of COVID [indiscernible]. So we continue to maintain that policy. That notwithstanding, our DPU was SGD 0.01532 for this quarter. And we will continue to strive to provide very stable distributions, right?
I'd move on to asset management side. We managed to secure the renewal of major lease for Hengde Logistics. We all know that the [ tenant ] is a big SOE in China, the Zhejiang tobacco company. So in terms of negotiations, right, we -- well, it's rather tough to negotiate for better rental and that -- Zhejiang because the renew rental for Phase 2 and the [ Hengde ] wants it to be the same as Phase 1, a renewal of network. As a result, without the service fee as well, we suffered somewhat in the total revenue. For the whole portfolio, the total revenue reduced by 0.8%. So that's one significant event in 1Q.
A second significant event as we have disclosed, was the incident in Chongxian Port Investment, which is our port serving this steel import to Hangzhou region. One train had collapsed and the other train suffered some damages of -- well, not total collapse, but one train cannot be used. So we are still waiting for the insurance company to see what action we need to take.
The last week was the China 1-week holiday. So we haven't got any updates yet since our announcement. We will keep you posted once we receive any substantial outcome from the insurers and from the property manager. Our occupancy is still a healthy 99.1%, that's because -- partly because of the 4 master lease.
Well, in terms of stable capital structure and debt structure, I think nothing has changed, except that the weighted average term of debt expiry is 1.4 years.
If you turn to the next slide, Slide #5 (sic) [ Slide #6 ], because of the higher DPU and the [ price ], so our yield is 8.7%. We also see some direction today, our share price is going up somewhat. So I think the yield will come down a bit. But at 1Q share price, I mean, our yield was 8.7%.
So the next slide is the timetable. I think the important is the record date 15th of June and distribution payment date is 29the of June.
Well, I will hand over the Q&A later on. I think I will pass the mic to CFO, who will continue on the financial review.
Okay. Thank you, Toh Sim. Thank you, everybody, for joining our analyst call today. So I'm just quickly going through the summary results section. I believe all of you probably have already read through to the slide as well also the announcement paper.
Let's look at Page 8 of the first Q FY '20 (sic) [ FY '21 ] summary results. So based on comparison between this year and last year, year-on-year comparison, the gross revenue was about 30.9% higher than last year. The main reason really due to 2 issues. One is really, in 2Q '20, there was a rental rebate that was the drop in revenue. And again in 2Q 2020 [ versus in 2021 ], RMB has continued to strengthened against Sing dollar. So the impact is about 3.5% strengthening.
So 2 of these are the main cause of the increase in revenue. Other than that, of course, there are some small escalation gains. So we are not going to mention that in here. So that has net property income increased by 30.9 million -- sorry, 30.9%.
Let's look at the finance costs. There was slight reduction in finance cost compared with last year. Really, there was the -- we have reduced a little bit of onshore loan due to certain amortization. That's why the finance costs will reduce a little bit. So in overall, the result this year really looked compared to last year, really, there was pretty much good [indiscernible].
So the distribution amount available per unit is SGD 0.01702 compared to last year was only SGD 0.01219, that's about almost 40% increase. After retention, we did take in, as Toh Sim already mentioned earlier, we are looking at global conditions. So we are taking basically a prudent approach in this case. So the -- we will keep the retention compared to last quarter at 10%.
So yes, so let's look at the last page, we're looking at companion between this quarter and last quarter. [ So as we close through ] last quarter, there was slight increase really mainly due to the strengthening of RMB as small escalation in master lease.
Please do know that our new master lease have kicked in, since one of them kicked in last November and 2 of them kicked in this year in January. So there was slight escalations compared to previous on master leases.
So [indiscernible] see finance cost was reduced by 1.5% compared to last quarter. That really is the cost of the short-term period. In -- that's about 1 day less compared to last year and also the effect of ForEx [ being counter ] there. So in overall, so the distribution compared to last quarter was about 7.4% higher.
Now we move to a stable balance sheet page on Page 10. The cash balance is remaining stronger than last year, we have accumulated SGD 160 million compared to last quarter, SGD 151 million. Due to strengthening of RMB, the investment probably has been valued up SGD 1,647 million compared to year-end of about SGD 1,623 million.
So the RMB term actually is the same number, however, because there's really the changes effect of foreign exchange. So the borrowing has been increased by about almost SGD 20 million. But we will look at the following detail in the next slide -- in the next slide later on. So other than that, we can see that NAV is slightly improved. That really is the fluctuation of the RMB and has seen a large bit of impact there.
We move to the capital management page. So the running interest rate, there's about 4.1%. Compared to last year was -- in last quarter was slightly drop a little bit. But really, it's really due to we have additional SBLC, which have a smaller interest rate.
So that moving down the interest rate or average interest rate down to 4.1%. Again, because of additional SBLC, the aggregate leverage is going up slightly from 38.1% last quarter to 38.3% this quarter.
Interest coverage ratio has increased to 2.79x compared to last quarter. Again, I mean, the foreign exchange has impacted this larger. It's pretty much of a -- to us, it's really considering RMB [ terms ] project market is quite stable in the case.
So our overall loan has really maintained very much similar to last year. Other -- only except our RCF has increased to SGD 101.7 million. So compared to last quarter, it's only SGD 85.7 million. So that's just the additional SBLC we issued during the year. The hedging for all these -- for all our -- we have used the call value option to really hedge our distributions and also interest expense. And strictly compared to last quarter, really not much changed.
And we move to next page, so there was really a bar chart for the distribution to unitholders and also DPU. So we have basically marked down with some -- without the retention, we can still see our DPU is a fairly -- really stable. And during last year to now, it really have increasing trend for 2020 and 2021.
And that ends my part for financial review, and let me pass the mic to Sabrina, please.
Hi, everyone. I'll just go to the portfolio performance for the 3 lines. Okay. So Page 15, it's rather stable what Wang Feng mentioned earlier, the IPO assets that are on master lease, the new rental escalation has kicked in mostly this -- I think this year.
So the only occupancy rate change is Wuhan Meiluote, which dropped around 5% from the [ spending above ]. [indiscernible] was 86.5%. And as of end March, it was 81.3% due to another renewal of e-commerce tenant. Our worry on the ground is that there are competition definitely on the ground, and we are still quite hopeful to probably renew 1 or 2 leases that are coming up for renewals in the second quarter of this year. But the rate might be a big challenging. Our goal is to at least try and maintain occupancy for this asset.
So moving on to the next page. At the start of the presentation, Toh Sim mentioned that we renewed the lease at Hengde Logistics, that is around 74,000 square meters. That accounts for around 4% of the gross and subject for renewal are -- [ 39.8% ] are due for renewal this year.
In terms of NLA, it accounts for around 7.7%, and the remaining of the leases that are up for renewal are mainly from Chongxian Port logistics, which last year, due to the COVID situation, extended by a year. It's a short-term lease. So this year, the pandemic is still very uncertain. So what we are looking at is also to enter into a 1-year type of lease. It is to extend for another year. And hopefully, of the space improves, we could probably increase rental.
But right now, the main thing that we are looking at is to extend for a year at the same rate. So in terms of our portfolio diversification, also [indiscernible] we did not have any new assets from -- first of all in this year.
Contribution by segment, there is a drop in the specialized logistics in terms of revenue. And this is also because of the -- in terms of the maintenance on track by Hengde Logistics, which we announced earlier last year, rather late last year in October and also last [ Friday ]. So as what Toh Sim mentioned earlier, this is expected to reduce our revenue by around 0.8% on the annualized basis. So another decline in revenue is the e-commerce asset segment. That is mainly contributed by Wuhan Meiluote.
So the last slide that I have is what Toh Sim mentioned earlier, the incident at Chongxian Port Investment. Last week, there was this holiday in China and therefore we were not able to really get much update from them. But we are now working with them against insurers on the ground, HR staff on the ground, to make sure everything is safe.
Our qualities have been involved. So please be assured that we are following all necessary procedures, government or regulatory, to make sure that the business and the parts -- less affected areas are not impacted by this or [ cost in season ]. Okay. Now I will -- thank you for your time. So now open the floor to Q&A. [Operator Instructions] Thank you.
Dale here from DBS. I have a few questions. Okay, my first question regards to the incident at the Chongxian Port. Just wanted to understand, I mean, I know that one is on the master lease. But what are the implications as in the master lessee has any cost in terms of loss of revenue?
Until now, we haven't got any feedback from the master lessee. So far -- I mean for them, we certainly see, one is the damage to the 2 cranes. And second is the reduction in terms of their operating revenue, because out of -- I think out of the 23 berths, now you have 2 that is not in operation. So definitely, in terms of income, they will suffer a short-term kind of loss of income. But this after the repair it, I think the business will be back to normal. So we think that this is a very short-term view. This is between 1 to 3 months kind of thing, so any effect will be short term.
So unlikely that they want to change their master lease. So -- and we -- since it's short term, so we are not thinking about changing the master lease. But if they come to us for any kind of -- ask us to help in whichever way, then we would think about that. But until now, we haven't got any request from them yet.
Okay. Okay. Sounds good. But just to understand that. So for example, I mean, okay, damage-wise, that one definitely will be paid for by the insurers. But in terms of loss of income, is it for them to do the claims? Or it will be for you to do the claims and then they will -- I mean reimburse them accordingly?
Dale, this is Wang Feng. Let me answer the question. Basically, our insurers are still in the progress. They have sent in investigators before the Chinese May holiday. And also, they will be going back again -- coming this week as well and probably next week to interview. And they also do a full detailed investigation to find out what is really the cause of this incident. So the cause could be a lot of things. It's ranging from, for example, maybe due to the ground -- unstable ground. And maybe it could be due to the operational issue.
So there are a lot of reasons and that's why they investigate to find out the source, the cause of this issue. And it depends on different cause of issue, then they can start -- let us know whether how the claim can be proceeded and who should be the person responsible, whether the insurers or master lessee or maybe subtenant. At this point in time, we do not have this detailed information to say whether insurance would say they will be fully covered or not. Because all of this, it will be depending on the investigation results at this point in time.
So only thing I can say we are working with them to have these things to work out, to try get this clear as soon as possible. Again, on the other hand, to avoid the loss of future operating revenue, we have already working with our PM there and started to prepare for the repairing of the crane and also the ground as well in the meantime. So try to shorten the period that operation can be restored. That's what -- I mean things I can share at this point in time.
Yes. One good point about this unfortunate incident is that there's no injury. Otherwise, as a legal person, I may not dare to go to Hangzhou anymore. Anyway, please go ahead.
Okay. Okay. And just to reconfirm, so you're saying that the expected downtime is not too long, just about 1 to 3 months?
Yes, yes. I mean based on our view in the repair work of some part of this -- or length of work, it's not that difficult. So long as we get approval from the government to make sure that our repair work, the plan is suitable, our fitting -- we have all the requirements before we started. So we already started the progress to sourcing for the replacement crane as well. Also sourcing for the party to party to repair the other damaged crane, which is still repairable. So this is already in progress. So our expectation for the operation of these 2 berths will be likely to be recovered back within 3 months.
Okay. Okay. Sounds good. Sounds good. Okay, and I have another related question. So I understand that both of your expiries for the rest of this year will come from the Chongxian Port Logistics, right? And how will this incident at this port investment actually affect your lease renewals? Would there be any impact at all?
Dale, I see no significant impact for Chongxian Port Logistics because that is the warehouse. Because a lot of these imports, part of that will go into the warehouse for processing, the other part will go spit out of the port to the users. So I think on the ground, they are able to manage that. We don't see any significant impact on the Chongxian Port Logistics there.
Okay.
Just to add on Toh Sim word, I know. So I probably just clarify a little bit. So on the operation of Chongxian Port Investments are really so-called unloading of this steel -- all this steel rebar things, so -- on the ground. And Chongxian Port warehouse, we are providing a service to tenants, giving them the space to store, the steels in our storage and processing. So this is -- although it have linkage, but it doesn't really affecting each other. So only thing is that I understand from master lessee, they will try to divert the tenant -- the requirement of the throughput, onloading of crane to other unaffected cranes. So they will just improve a little bit -- maybe a little bit OT for the other cranes. So -- but for logistics, it's going to be affected.
Sabrina?
Anyone else has any questions?
This is [ Lin Chin ] here. Can I understand from the financial statement, right, so does this increase in late fee payment interest of SGD 6.6 million? So can I understand which tenant? Or whether is it a single tenant? Or is it a multiple tenant? And from which segment it is from? And how long has it been late for? And whether is it recoverable?
So you mean is the -- are you referring to the late fee income?
Yes, correct.
So that's about 260,000, right?
I understand that there's restatements stating that the increase in late fee payment of SGD 6.6 million. So this is from late payment interest, right?
Okay. Okay. You may be referring to the -- note to the balance sheet, right? So on the #3, note to the balance, right?
Right.
Okay. So there was -- we mentioned about there was an increase in rent and late payment penalties receivable of SGD 6.6 million. Okay. So this is on the -- we are talking about the increase in trade and other receivables is due to the 2 of the issue: one is the increase in the rental receivable; and another, late fee receivable. So these 2 together is SGD 6.6 million. So that's the first thing that I didn't correct in this, right? So the majority of this SGD 6.6 million is really the rental receivable increase, not the late fee. So the late fee actually is about SGD 260,000 only, receivable. And that's related to the -- we have also disclosed in there below, the master lease agreements that have -- basically have a late fee interest of 0.03% per day, and that is a SGD 0.3 million late fees accrued at his point. So out of SGD 6.6 million, it's only SGD 0.3 million is the late fees.
Okay. One more. Let me just explain. I -- most of this issue relates to the master leases. And as usual, this issue has been here for a while. You may see several disclosure. The reason being that the tenant -- because in China it's quite common to pay quarterly, you see. But our master lease has required them to pay monthly. So when they pay quarterly and then that they should have paid monthly, so that choke up the late payment tenancy fee that they have to pay.
I think this quarter, what is different from previous cases was that. Now the interest rate is more reasonable, not the 72% per year in the previous master leases. Shown now, as Wang Feng said, 0.03% a day. So all in all, when they pay the rental quarterly, they also took up some late payment fee because when we compute monthly, the late payment fee kick in.
I mean the good thing is that -- I mean, the master lessee, they agreed to pay both the rental receivable and the late fee as well. So we have no issue about your -- a question about whether this rental can be collected. This has not been an issue for -- since IPO, so we continue. But that now is pending. We continue to monitor that. I know we always chase them whether they should pay up monthly, but the master lessee still prefer to pay quarterly, not extending the late payments fee. I think they are prepared to trade a little bit presently. So it will just stay as such there, yes. And we must say that we have collected the late payment. So that fee, the SGD 200,000 that Wang Feng said, has been collected here.
Sure. Another question from me is with regards to Wuhan Meiluote. So just Sabrina mentioned that this is going to be challenging. Can I understand what's the current passing rate versus the market rate?
We are probably in the single digit -- it can be single digit higher than what our nearest competitor is charging. That is on the Hengde Logistics estimate. It's what we are seeing right now.
Yes. Overall, in the portfolio, Wuhan Meiluote is very small. So that still have some small impact on the rental. Wuhan, I think, we are at the upper single digits in terms of rental that we are higher. Well, partly because in the past, the supply was not as high as now. As more and more warehouse come in, the competition gets keener. But despite this, I think because we are familiar with the tenant, I think we -- I mean we want to keep that occupancy. And then it may be we probably just adjust the rental downwards by, well, maybe 5%, 6%, 7%, 8%, whichever is the case and to keep the tenants. But the rental, in fact, overall is small. It's small, yes.
Vijay from RHB, can you hear me?
Yes.
Yes, Vijay.
Okay. I have a couple of questions. Firstly, across the world and even in China, logistics assets have been benefiting quite strongly from COVID-19. Maybe can you give a sense on how the underlying operations for your sponsors in terms of the master lease assets which they are doing. And maybe can you give us some color in terms of the occupancy cost or the rents over the sales in these assets in 2020 compared to that of the past. The reason why I'm asking is that I'm not very sure why master lessee still wants to delay the payment or okay to pay the late payment charges if their underlying operations are doing well and benefiting from the COVID crisis.
Thanks, Vijay, in this is a very good question. I think there are -- certainly, the master lessee is doing well because, as you said, the overall situation is -- has been improving in terms of e-commerce, in terms of the usage of the warehouses. We don't track how -- what is the income of the master lessee. I mean they probably also won't share with us.
Certainly, their service income has gone up because, in terms of e-commerce, they don't charge by renter per square meter or things like that, they charge by the rents per rec per day. It's a small, small rec per day. 1 square meter probably has used 20, 30 or 40 recs. And they charge by the income processing per piece of item that they handle.
So that being the case, I think the master lessee, they are doing well. As to why they prefer to pay the late payment penalty and that -- well, first is, as I said, they prefer to pay quarterly. And that's -- because this is in the group, I suppose they are finance is managed overall within the group level. So that's their choice. We don't question that. So long as they pay up the rental and the pay up the late payment penalty, I think we are quite happy that, that -- certainly, it is not a credit issue here. I can assure you that it's certainly not a credit issue here.
Okay. Okay. Do you have any figures in terms of the utilization of your assets by a master lease -- master lessee? How has that improved pre-COVID to post-COVID?
We -- because for a while, we have not been there, maybe we try to find out from the property manager, and we get back to you. Because we don't check these numbers anymore, yes. Wang Feng, do you have that number?
Vijay, are you referring to the COVID -- during the time, they started to see temporary cease operation until now or you're tracking before situation compared to now.
I'm asking -- I mean logistics asset has been seeing an increased demand post-COVID. I'm just asking how has the sponsor benefited or the assets benefited from this trend? And is sponsor seeing increased utilization rates of the assets? Are sponsors -- overall sales from these assets, has it increased and how it has increased kind of? That's the thing I'm asking.
Okay. So it's basically the information from the sponsor side. I mean, first of all, I mean, for sponsoring us, we don't really share all this detailed information, in particular the operational data. Again, I mean, that's the kind of thing we are also an independent REIT compared to them. We are only just [ report ] to our REIT point of view. So when we are discussing or negotiating any of the master lease agreement with them, if we know that they are bidding, really booming, so you understand what we're going to be asking for, right? So we're going to be asking for higher escalation.
So this is -- obviously, the information is really sensitive. They are not really keen to share with us in the case. But based on our understanding from PM, their business are doing well. And that's one, for sure.
Again, let's go back to the question first, Vijay, about why the they're paying for late fees. I mean, in China, because they can also pay in a quarterly basis. For them to matching the cash inflow from the underlying tenant to us, naturally, they do take the same process, so they would do the quarterly payment to us. It's not in net interest to give us advanced cash to subsidize for their tenants payments for sure.
And again, go back to the little bit of this we waiver -- sorry, the late fees they going to pay to us. And to [indiscernible] really, compared to the overall of this rental, it's really small. And again, we believe that they have made sufficient profit to cover out this little bit of penalties paid to us, so they don't really getting much of trouble about that at all.
So -- and for us, we have -- basically, we are sure that we have a large amount of security deposits in place to cover all and then worry about less than 2 months of receivables in the book. So we are very comfortable. There's no credit REIT to worry about. Again, we have additional income. That's always good for REIT. So in that case, we just try to chase them to pay and in turn we get more money. So why not? I mean to us, this is really the better outcome for us, yes.
Okay, okay. That's clear. I mean second, coming back to the Hengde Logistics. Was there any alternative options considered for these assets? Because from what my understanding is that this asset is a specific sophisticated asset and it was previously itself commanding a slightly lower rent than market. So was there other options explored for this asset in general?
Vijay, this is -- Hengde is a very sizable asset in terms of rental, in terms of overall occupancy areas. So within a short time if we can continue to secure Hengde, secure it from the Zhejiang Logistics -- Zhejiang Tobacco, I think we would prefer to do so even if we suffer a little bit in terms of rental. Because to -- this for 74,000-over square meters, if you broadly stop -- of course, there is a question, it's already in our mind, what is the stop and then what should we do?
Of course, there are alternative is that we can say that we can lease to people who need the warehouse to store wine, to store beverages, to store chocolate because of the humidity control, the temperature control and all this. But within a short time, this is still not so obvious to fill up the space. So if Zhejiang Tobacco wants to continue, I mean, we are quite happy to continue as part of the negotiation here. I think the major part of the rental reduction actually is the service that they want to do it out of our hands. So that is more significant than the rental reduction. And Zhejiang is such a big tenant that we don't want to let them go.
Okay. Okay. Got it. Got it. No, actually my concern is from the point of view of -- I mean, across market spectrum, logistics sector and logistics assets have been doing quite well. But I don't see the sales strength in terms of rent reversions or rent uplifts or occupancy from your portfolio. So I'm just trying to figure out where is this mismatch coming from.
Well, partly it's because of the master leases, because the rental has been locked in with whatever escalation, that's one reason. And second reason is that in terms of the master leases, our rental has always been in the -- at the upper end of the market rental range. So already, we are high in terms of rental and with the escalation is even higher every year. So in that sense, that -- the master lessees are doing well. I mean we don't force them to -- halfway, to change the master lease rental, right? We only change it when the master leases expire. That's one.
Second point is that in this kind of rental, because as I expressed earlier, right, the -- in terms of negotiation in terms of the rent, they also know we need them and that as a state-owned enterprise with an annual revenue of close to RMB 100 billion, of course, they are negotiating with -- from the position of strength. So we -- well, that explains that in terms of the tobacco warehouse, the rental doesn't go out that much because they are not doing e-commerce, they are actually tobacco.
And in terms of the overall smoking population, in the past, you go into a meeting room, it's full of smoke. Today, it's not so. So which means that -- I mean, this smoking has somewhat reduced. So probably that also explains that in terms of the rental, it's not like e-commerce, right? So e-commerce warehouse rental has been lucky, and then the tobacco warehouse, tobacco in terms of overall booking of this has gone down somewhat. And then the SOE is always very hard to negotiate. So that's the situation there.
Any more last question?
Sabrina, Dale here again. Can I ask a few more questions?
Yes.
Welcome, Dale.
Just -- okay, Toh Sim, I just wanted to find out more about this issue at Wuhan Meiluote, so there has been a slight dip. So I just want to understand a bit more on that, is it because the tenant has moved to a competitor's property? Or there is a change in direction of business?
Wang Feng, you know?
I think, if I'm not wrong. So that tenant moving up in a -- actually [ different ] business, if I'm wrong.
Yes. So earlier lease was actually a temporary lease for like 3 -- around 5 months to COVID [indiscernible].
It was the -- yes, yes.
Also Chinese New Year.
So yes, correct. So they actually expired -- the lease expired early this year. So they decided probably -- the lease on it maybe coming...
[ Cyber Monday ], yes.
Yes, [ Cyber Monday ]. So they decide not to renew.
In this case it was because of seasonal. They lease short term for Single's Day and Chinese New Year. And then after that, they stopped.
Okay. Okay. Got it. Hopefully, you have more such tenants, because now they have the 1.1 sale, 2.2 sale, 3.3 sale.
[indiscernible]
The other major one beside the Single's Day is 18th of June.
18 sale?
18 of June. That is Jingdong's day, yes.
Jingdong day.
Okay. Okay.
[indiscernible] the 1.1, 2.2, 3.3...
Every month, yes.
Every month.
Well, when you have too many, it's no more.
Yes. [indiscernible]
Yes. yes, exactly. Okay. And then the other question I have is with regards to the borrowing. So there has been a SGD 60 million drawdown in RCF. I just want to understand a bit more on the purpose of this.
Okay. So generally, we use these SBLC for 2 main purpose. One is really to pay off our operating expenses including finance costs, another one is for the distribution purpose as well. So we try to take it in a good time of the exchange rate, so we can use the SBLC. So we have SGD 15 million. So you can see that each quarter of distribution is about SGD 12 million, right? So our interest [ expense offshore ] is about SGD 3 million to SGD 4 million. So that is accounting for the SGD 15 million.
So I will end the briefing here. If there's any more questions, please free to call, e-mail or just want to ask, [ you know where to reach me ]. So thank you.
Thank you all. Thank you all.
Good topic holiday tomorrow.
Yes. Stay safe.
Yes. Stay at home. [ Bye ]. Okay. Bye.
Okay. Thank you. Bye-bye.
Bye.
Bye.