Notes to the Financial Statements For the financial year ended 31 December 2025 32. CAPITAL MANAGEMENT (CONT’D) At the reporting date, the Aggregate Leverage and interest coverage ratios of the Group are as follows: Group 2025 2024 Aggregate leverage ratio(1) 43.4% 42.8% Interest coverage ratio(2) 2.5x 2.5x (1) The aggregate leverage ratio includes ESR-REIT’s 49.0% share of the borrowings and total assets of PTC LLP, but excludes the effects arising from the adoption of FRS 116 Leases. (2) The interest coverage ratio is calculated by dividing the trailing 12 months earnings before interest, tax, depreciation and amortisation (excluding the effects arising from the adoption of FRS 116 Leases and the effects of any fair value changes in financial instruments and investment properties, and foreign exchange translation) (“EBITDA”), by the trailing 12 months interest expense (excluding the effects arising from the adoption of FRS 116 Leases) and borrowing-related fees (including amortisation of debt-related transaction costs) and distributions on perpetual securities. The Manager monitors and observes the CIS Code issued by the MAS concerning limits on total borrowings. As part of its finance policy, the Board of the Manager (the “Board”) proactively reviews the Group’s capital and debt management regularly so as to optimise the Group’s funding structure to meet its investment opportunities. The Board also monitors the Group’s exposure to various risk elements and externally imposed requirements by closely adhering to clearly established management policies and procedures. Sensitivity analysis on the impact of changes in EBITDA and interest rates on interest coverage ratio Interest coverage ratio 2025 2024 Group 10% decrease in EBITDA 2.2x 2.2x 100 basis point increase in weighted average interest rate 2.0x 2.1x 10% increase in EBITDA 2.7x 2.7x 100 basis point decrease in weighted average interest rate 3.1x 3.0x 33. SEGMENT REPORTING Segment information is presented based on the information reviewed by the Manager’s Chief Operating Decision Makers (“CODMs”) for performance assessment and resource allocation. The Manager considers the business from a geographical segment perspective. Geographically, the Manager manages and monitors the business by 3 countries: Singapore, Australia and Japan. All geographical locations are in the business of investing in industrial properties, which is the only business segment of the Group. The Manager assesses the performance of the geographical segments based on a measure of Net Property Income (“NPI”). Interest income and finance expenses are not allocated to the segments as treasury activities are centrally managed by the Group. 220 ESR-REIT ANNUAL REPORT 2025
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