IGB REIT's 1Q net property income down 36%, to distribute 1.33 sen per unit

KUALA LUMPUR (April 26):  IGB Real Estate Investment Trust's (IGB REIT) net property income fell 36% to RM43.72 million in the first quarter ended March 31, 2021, from RM68.36 million a year earlier, largely due to lower car park income and higher allowance for impairment of trade receivables as a result of Covid-19.

Earnings per share declined to 1.23 sen from 1.93 sen, the owner of the Mid Valley Megamall and The Gardens Mall said in a bourse filing.

IGB REIT's quarterly revenue fell 20.5% to RM99.44 million, from RM125.01 million previously, underpinned by lower rental income from tenants.

The trust said its manager has approved a distribution of 97.5% of the its quarterly distributable income, amounting to RM47.4 million or 1.33 sen per unit, to be paid on May 31.

On a quarter-on-quarter basis, IGB REIT's net property income also saw a decline from RM72.10 million in the preceding quarter.

IGB REIT noted that the Malaysia Retailers Association (MRA) and the Retail Group Malaysia (RGM) expect the retail sector to contract by 13.4% for the first quarter of 2021.

“RGM has revised downwards its 2021 retail sales growth projection to 4.1% from 4.9% previously, mainly due to the re-implementation of the movement control order (MCO) in January 2021,” it said.

The group also pointed out that a prolonged Covid-19 pandemic is expected to cause sluggish economic and business situations.

“The number of Covid-19 cases impacted the footfall and vehicle traffic volume to the retail malls.

“The directors of the manager are monitoring the current volatility and uncertainty closely and take appropriate and timely actions to mitigate the impact on IGB REIT’s operations and financial performance,” it added.  

IGB REIT units closed one sen or 0.57% higher at RM1.77 today, giving it a market capitalisation of RM6.31 billion.

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