UOA REIT’s net profit eases 10.42% in 1Q2010

KUALA LUMPUR: UOA Real Estate Investment Trust (REIT) recorded lower net profit of RM6.716 million in its 1Q ended March 31, 2010, a drop of 10.42% from RM7.498 million in the same period last year.

Its revenue eased 6.53% to RM10.715 million in the quarter under review against RM11.464 million in the same quarter last year.

Against the corresponding quarter last year, gross rental has decreased by approximately 6.71% or RM767,108 mainly due to pressure in rental rates and reduced occupancy rates of the investment properties.

Meanwhile, operating expenses have increased slightly by approximately 0.85%, mainly due to increased property maintenance expenses (RM59,641) and manager's fees (RM33,563).

This was offset by a reduction in borrowing cost (RM20,826) and a lower allowance for doubtful debts made in the current quarter as compared with the previous corresponding quarter.

The net reduction in realised income before taxation amounted to RM783,166 or approximately 10.44% and earnings per unit was reduced by 0.32 sen or approximately 10.49% against the corresponding quarter last year, from 3.05 sen to 2.73 sen.

“The manager expects the occupancy and tenancy rates of the properties to be sustained for the remaining part of the year,” said UOA REIT.

Rental income is expected to remain flat for 2Q2010 and is anticipated to improve gradually in 2H2010 due to the delayed effects of the recovering economy.

“The manager will continue to adopt an active operating and capital management strategy to enhance the yields and returns of the existing property parcels. The manager will further seek opportunities to acquire real estate that meet the objectives of the Trust,” it added.

UOA REIT manages four commercial buildings in the Klang Valley: UOA Centre, UOA II, UOA Damansara and UOA Pantai.