Friday 29 Mar 2024
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KUALA LUMPUR (May 5): KLCCP Stapled Group has reported a 3.85% decline in net profit to RM176.88 million for the first quarter ended March 31, 2020 (1QFY20), from RM183.96 million a year earlier, due to the negative impact in its hotel segment.

This was as a result of travel restrictions imposed from the Covid-19 outbreak and Movement Control Order (MCO) enforced by the government, said the group, which comprises KLCC Property Holdings Bhd and KLCC Real Estate Investment Trust (KLCC REIT).

Quarterly revenue was up by a marginal 0.32% to RM354.59 million, from RM353.45 million previously, the group said in a filing to Bursa Malaysia.

It attributed this to the resilience in the office segment, buoyed by new tenants from the anchor-to-specialty reconfigured space at the retail mall.

The group has proposed a distribution per stapled security of 8.3 sen — comprising 5.84 sen for KLCC REIT and 2.46 sen for KLCC Property — to be paid on June 18.

KLCCP Stapled Group said that under its hotel segment, Mandarin Oriental Kuala Lumpur was severely impacted by the Covid-19 outbreak.

The segment reported a wider loss before tax of RM8.84 million, versus RM392,000 in the previous corresponding quarter.

The office segment, which contributes 42% of the group’s revenue, meanwhile reported a 0.29% decrease in profit before tax (PBT) to RM121.07 million from RM121.42 million, due to higher one-off repair and maintenance expenses. 

“The group’s office portfolio, which comprises the Petronas Twin Towers, Menara 3 Petronas, Menara ExxonMobil and Menara Dayabumi, continued to anchor the performance of the group, backed by its long-term, locked-in leases,” said KLCCP Stapled Group.

The retail segment, on the other hand, posted a PBT of RM103.1 million, up 4.52% higher from RM98.65 million in 1QFY19. This was mainly due to the increase in rental contributed by the new specialty tenants, following the partial completion of the reconfiguration exercise.

On prospects, the group expects the performance of the office segment to remain stable backed by the triple net lease agreements and long-term leases.

Amid the Covid-19 pandemic, the group anticipates that the hotel segment will be adversely affected for the rest of the year.

For the retail segment, KLCCP Stapled Group remains cautious as Suria continues to operate in a challenging environment, taking into consideration the potential changes in consumer behaviour and sentiments upon the MCO being lifted.

“We are likely to continue to feel the impact of Covid-19 for several months to come as the consumer sentiment is expected to remain cautious across all business segments,” said KLCC Property Holdings Bhd chief executive officer Datuk Hashim Wahir.

“Despite the looming uncertainties, we will strive to remain resilient to deliver long-term value to our holders of Stapled Securities, and enhance tenants, shoppers and hotel guests communications in complying with the new normal while maintaining the highest standard of services offered,” he added.

With the conditional MCO that commenced yesterday, Suria KLCC has resumed operations, albeit with shorter business hours. However, stores and outlets such as the cinema, gym, hair, beauty salons and barber and reflexology/spa remain closed during this time.

Mandarin Oriental is partially open with its restaurants, Mosaic, Lounge on the Park and Aqua offering a smaller menu while all the spa and wellness facilities remain closed. Hotel rooms are open but are restricted to only sectors outlined by the government. 

The offices are also open to tenants in the essential services sectors, while those in the non-essential services sector remain working from home, said KLCCP Stapled Group.

Shares in the stapled security closed two sen or 0.25% lower at RM7.83 today, valuing the group at RM14.14 billion.

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