Al-Hadharah Boustead REIT posts 50% rise in earnings

KUALA LUMPUR: Malaysia's only Islamic plantations real estate investment trust, Al-Hadharah Boustead REIT, saw a profit after tax of RM23.9 million for 2QFY11 ended June 30. This is a 50% increase over RM15.9 million a year ago, mainly due to an increase in fixed rental income and the doubling of performance-based profit sharing.

Revenue rose 53.4% to RM27.7 million from RM18.1 million a year ago.

For the six-month period, net profit rose 33.3% year-on-year to RM44 million from RM33 million. This was achieved on the back of higher revenue of RM50 million compared with RM37 million in the same period last year.

The key factors for the increase in net profit were the commencement of rental income for the Taiping Rubber Plantations and Sutera Estates as well as a doubling of performance-based profit sharing from RM7.2 million last year to RM18.1 million this year.

Expenses were also higher, however, mainly due to an increase in profit-sharing expenses on financing and those related to financing the facility.

The REIT will be making an income distribution of four sen to unitholders which will be paid in September. Net asset value as at June 30, 2011 was RM1.43 per unit.

"The quarter under review has been a strong one given the backdrop of our results. This was driven by strong crude palm oil prices coupled with the injection of new assets, particularly the Sutera and Taiping Rubber Plantations (including Trong Oil Mill) for an aggregate purchase consideration of RM190 million," said Tan Sri Lodin Wok Kamaruddin, chairman of Al-Hadharah Boustead REIT, in a statement.

On its prospects, the fund noted that CPO prices are expected to remain strong in 2HFY11 despite rising production. It added that the performance-based profit sharing of the fund maybe slightly lower but still at a healthy level.