AmFIRST REIT's 4Q NPI rises 15%, pays 2.13 sen DPU

KUALA LUMPUR (April 19): AmFIRST Real Estate Investment Trust (REIT) saw its net property income (NPI) grow by 15.37% to RM19.02 million in the fourth quarter ended March 31, 2017 (4QFY17), from RM16.49 million a year ago, mainly due to additional revenue from the newly acquired property, Mydin HyperMall and higher occupancy in Menara AmBank.

However, in a filing with Bursa Malaysia, AmFIRST REIT said these net positive contribution have been partially offset by lower revenue from Prima 10, The Summit Subang USJ (Office) and Menara AmFIRST as a result of lower occupancy as well as exclusion of AmBank Group Leadership Centre (AGLC) upon its divestment on March 31, 2016.

"Interest expenses for FY17 of RM36.1 million was higher by 32.1% compared with the preceding corresponding year as a result of the additional borrowing to finance the acquisition of Mydin HyperMall and various asset enhancement initiatives of the existing properties," it added.

The REIT declared a final income distribution of 2.13 sen per unit — down 31% from 3.07 sen in the same period a year ago, as total income available for distribution fell by nearly the same quantum due to the absence of a one-off gain from the AGLC divestment — payable on May 25 this year.

Revenue for 4QFY17 grew 10% to RM28.59 million from RM26.03 million a year ago.

Cumulatively, the REIT recorded a NPI of RM72.80 million for FY17, which is 19% higher than RM61.09 million in FY16, as revenue grew 12% to RM111.54 million from RM99.79 million.

AmFIRST REIT said the main challenge ahead is to further improve occupancy in some of its properties.

“Mindful of the challenging market condition, the manager (Am ARA REIT Managers Sdn Bhd) will continue to strengthen the operation initiatives and step up leasing effort to improve the occupancy of the properties under the trust’s portfolio,” it said.

Nonetheless, AmFIRST REIT expects to deliver an improved performance for FY18.

AmFIRST REIT traded unchanged at 80.5 sen yesterday, valuing it at RM552.55 million. — theedgemarkets.com

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