KUALA LUMPUR: Sunway Real Estate Investment Trust’s (Sunway REIT) net profit slipped to RM65.66 mil in the third quarter (3Q) ended March 31, 2020, from RM68.91 mil a year earlier as its hotel and retail segments were affected by the Covid-19 pandemic and implementation of the Movement Control Order (MCO).
Revenue eased to RM140.8 mil from RM151.49 mil previously, it said in a filing with Bursa Malaysia today.
Net property income for the group’s retail segment fell 15.6% year-on-year to RM67.08 mil while that for the hotel segment dropped 37% to RM13.55 mil. In contrast, the office and services segments generated better net property income.
Overall average occupancy rate of the hotel segment plunged to 42% from 66% a year earlier due to the pandemic and the MCO imposition.
In a separate statement, Sunway REIT CEO Datuk Jeffrey Ng said the operation of the retail segment was adversely affected by the MCO as only essential services were permitted to operate.
Meanwhile, food and beverage operators were limited to deliveries and take-away services, he noted.
Hence, Ng said, the company had committed to a rental support programme to assist affected retail tenants during the MCO period to ensure the business sustainability of these tenants during this time.
He said Sunway REIT’s manager had proposed a cash conservation programme as part of its capital management strategy in managing the REIT’s cashflow during the conditional MCO period and post-MCO.
“The manager has adjusted the frequency of income distribution from a quarterly basis to semi-annual basis, with income distribution of at least 90% of the distributable income of Sunway REIT in each financial year to sustain through this challenging period,” he said.
No income distribution was proposed for the quarter under review as the income distribution frequency of Sunway REIT has been varied. For the same quarter last year, the group gave an interim income distribution of 2.58 sen per unit or RM75.98 mil.
“We are re-prioritising our Asset Enhancement Initiatives while continuing to assess new income-generating strategies such as yield-accretive acquisition, property development and strategic Asset Enhancement Initiatives in anticipation of a post-pandemic recovery in the longer term,” Ng added. – May 19, 2020, Bernama