Tower REIT’s 2Q net income falls 6.36% on lower occupancy rate

KUALA LUMPUR (Aug 16): Tower Real Estate Investment Trust’s (REIT) second quarter net income fell 6.36% to RM5.4 million or 1.94 sen per share, from RM5.8 million or 2.07 sen a year earlier, due to lower occupancy rate, lower interest income and higher property operating cost.

In a filing with Bursa Malaysia, Tower REIT said revenue for the second quarter ended June 30, 2016 (2QFY16) dipped 1.4% to RM9.36 million from RM9.5 million in 2QFY15.

The trust’s manager declared an interim income distribution of 3.2 sen per unit amounting to RM8.9 million, representing about 76% of the realised distributable net income for the six months ended June 30, 2016 (6MFY16) which would be paid on Sept 14.

For its 6MFY16, net income rose 19.3% to RM11.77 million or 4.2 sen per share, from RM9.86 million or 3.52 sen per share a year ago.

Revenue came in 0.55% lower at RM18.9 million as opposed to RM19.08 million in 6MFY15.

Tower REIT said its prospects remain challenging due to oversupply but it plans to continue taking steps to manage the portfolio in order to maximise returns to unitholders.

The trust’s price went up one sen or 0.81% yesterday to RM1.25, for a market capitalisation of RM347.8 million.

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This story first appeared in TheEdgeProperty.com pullout on Aug 16, 2016, which comes with The Edge Financial Daily every Friday. Download TheEdgeProperty.com pullout here for free.