Tower REIT 2Q profit falls 22.6% to RM5.45m

KUALA LUMPUR: Tower Real Estate Investment Trust (Tower REIT), which is controlled by tycoon Tan Sri Quek Leng Chan, slipped 22.6% in its net profit to RM5.45 million for the second quarter ended June 30, 2014 (2QFY14), compared with the previous corresponding quarter’s net profit of RM7.04 million.

In a filing with Bursa Malaysia yesterday, the trust said its revenue for the quarter under review was RM11.80 million, 10.77% lower than last year’s RM13.22 million. It said the revenue decrease was due to the lower occupancy rates for Menara HLA and HP Towers.

“The decrease in revenue together with higher operating expenses reduced net realised income for the quarter under review,” said Tower REIT.

Its net realised income for 2QFY14 was RM5.05 million, a 22.82% drop from the previous corresponding quarter’s RM6.54 million.

With the lower earnings, Tower REIT declared a dividend of 3.83 sen per share; the previous corresponding quarter’s dividend was 5.09 sen per share.

Tower REIT’s net profit for the first half of this year (1HFY14) was RM12.21 million, 25.55% lower than the previous corresponding period’s RM16.40 million. Net realised income was RM11.65 million, indicating a 25.94% drop from the previous year’s RM15.73 million.

Its revenue of RM23.92 million for 1HFY14 was 11.84% lower than the previous corresponding period’s RM27.13 million.

In the same filing, the trust said the imbalance between

office supply and demand is expected to continue to exert pressure on the occupancy and rental rates.

Thus, going forward, it said its prospects will remain challenging.

“Notwithstanding the challenging operating environment, the manager [of Tower REIT] will continue to take active steps to manage the portfolio assets to maximise returns to unitholders,” said Tower REIT.

The trust’s net asset value per unit as at 2QFY14 was RM1.8178. Its stock closed unchanged at RM1.44 yesterday.

This article first appeared in The Edge Financial Daily, on July 22, 2014.


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