CMMT 3Q distribution drops on declining net property income

KUALA LUMPUR (Oct 26): CapitaLand Malaysia Mall Trust’s (CMMT) distribution per unit (DPU) fell 2.3% to 2.08 sen for the third quarter (3Q) ended Sept 30, 2017, from 2.13 sen a year ago.

CMMT said the lower distribution was due to lower net property income (NPI), which declined 2.2% to RM60.1 million from RM61.43 million, due to higher operating expenses. In a filing with Bursa, the group said the higher operating expenses were mainly due to the increase in service charge at Sungei Wang Plaza, higher property maintenance and higher utilities consumption.

CMMT added that the poor performance at its other malls in the Klang Valley — Tropicana City Mall (pictured) and The Mines — had also contributed to the drop in the NPI, which was offset by better performance from the Gurney Plaza in Penang and East Coast Mall in Kuantan. As for its financial position, CMMT said its borrowings stood at RM1.33 billion, equivalent to a gearing ratio of 32.8%.

“During the quarter, CMMT converted a floating rate term loan of RM128.7 million to a three-year fixed rate term loan,” it added.

Going forward, CMMT said it expects both consumer and business sentiments to remain cautious for the remaining part of the year. “As more shopping malls are expected to open towards the year end, particularly in the Klang Valley, the operating environment is expected to remain challenging,” it said.

This article first appeared in The Edge Financial Daily, on Oct 26, 2017.

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