Thursday 28 Mar 2024
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KUALA LUMPUR (Apr 28): IGB Real Estate Investment Trust (IGB REIT), which has the Mid Valley Megamall and The Gardens Mall in its portfolio, sees a distributable income for the three months ended March 31, 2015 (1QFY15) at RM79.60 million, up 19.4% on-year from RM66.67 million, due to higher total rental income and lower property costs in the current quarter.

In its filing to Bursa Malaysia today, IGB REIT (fundamental: 2.8; valuation: 0.65) said its distributable income per unit for 1QFY15 was at 2.29 sen compared to 1.89 sen in the immediate preceding quarter.

But no distribution was declared for 1QFY15 as the REIT’s manager “intends to distribute 100% of distributable income on a half-yearly basis for six-month period ending June 30, 2015 and Dec 31, 2015”.

Meanwhile, IGB REIT said its net property income for 1QFY15 was at RM90.05 million, up 16.21% from RM77.48 million a year ago.

IGB REIT’s gross revenue for 1QFY15 was at RM125.4 million, up 9.9% against 1QFY14’s RM114.1 million, which it said was mainly due to higher total rental income in the current quarter.

On prospects, the REIT said it could see a slowdown in the retail sector, especially in terms of consumer discretionary spending in view of the implementation of the goods and services tax (GST).

It pointed out that the retail industry already has a disappointing showing with retail sales contracting 0.85% in the last quarter of 2014, according to Retail Group Malaysia (RGM).

It also pointed out that for 2015, RGM has revised downwards its projected retail sales growth for a second time to 4.9% from 5%.

“Given the backdrop of a confluence of many diverse factors, including the weak ringgit and the rising cost of living, the retail sector faces a challenging business environment. [Nevertheless] the manager remains optimistic that given the current satisfactory performance of IGB REIT’s existing business portfolio, the operational results of IGB REIT for the financial year 2015 is expected to be satisfactory,” it added.

The REIT closed up 2 sen at RM1.37 today, which gives it a market capitalisation of RM4.73 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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