AmFIRST REIT 4Q NPI dips 4.3% amid higher property expenses and lower occupancy

KUALA LUMPUR (May 19): AmFIRST Real Estate Investment Trust (AmFIRST REIT) saw its net property income (NPI) for the fourth quarter ended March 31, 2020 (4QFY20) decline by 4.27% year-on-year (y-o-y) to RM22.42 million from RM23.42 million following higher property expenses and lower revenue due to reduced occupancy at The Summit Retail, Wisma AmFIRST and Jaya99.

Revenue for the quarter dipped by 1.42% to RM33.43 million from RM33.91 million, it announced in a bourse filing yesterday.

Meanwhile, quarterly property expenses rose by 4.92% y-o-y to RM11.01 million from RM10.5 million previously.

The group noted that it saw lower occupancy at The Summit Retail, Wisma AmFIRST and Jaya 99, but this was somewhat offset by higher occupancy achieved for Menara AmFIRST, Wisma AmFIRST, Prima 10 and The Summit Office.

Meanwhile, the increase in property expenses was mainly attributed to higher service charges at The Summit Subang USJ and increased utilities expenses.

However, its interest expense was 5.6% lower y-o-y at RM9.06 million from RM9.60 million in 4QFY19 as a result of three cuts in the overnight policy rate (OPR) by Bank Negara Malaysia (BNM) to 2%.

Full-year NPI came in 4.23% lower y-o-y at RM76.56 million from RM79.94 million posted a year ago. Meanwhile, its FY20 revenue dipped 0.45% to RM120.68 million from RM121.23 million.

AmFIRST REIT noted that The Summit Subang USJ contributed 21% of its FY20 revenue, and that both its retail and hotel components were badly affected as a result of the movement control order (MCO).

“Given the significant business disruption brought about by Covid-19, the retail and hotel operating environment is expected to remain challenging post-MCO for business recovery. The sustainability of the retail and hospitality sector will depend on the revival of economic activity and consumer sentiment towards spending on retail malls and travelling.

“Overall, the trust expects to be negatively impacted by this outbreak on its financial performance and asset value. However, as the uncertainty and challenges that the Covid-19 pandemic brings with it are unprecedented, the full extent of the impact on the trust’s financial performance for the next reporting period cannot be determined at this stage,” it said on its prospects.

The REIT also declared a final distribution per unit (DPU) of 1.49 sen, payable on June 5.

This brings a total FY20 DPU of 3.35 sen, from the four sen DPU posted for FY19, according to a bourse filing.

Units in AmFIRST REIT closed 1.11% or half a sen lower at 44.5 sen yesterday, valuing it at some RM305.45 million.

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