KLCCP Stapled Group’s 1Q net profit falls 17.39% to RM146.13m, dragged by retail and hotel segments

KUALA LUMPUR (May 4): KLCCP Stapled Group’s net profit for the first quarter ended March 31, 2021 (1QFY21) fell 17.39% to RM146.13 million, from RM176.88 million a year ago, as the prolonged Covid-19 pandemic dragged the group’s retail and hotel segments.

The group, which comprises KLCC Property Holdings Bhd and KLCC Real Estate Investment Trust (KLCC REIT), also saw its quarterly revenue slip 20.37% to RM282.37 million, from RM354.59 million a year ago, its filing with Bursa Malaysia showed.  

The group declared a dividend of seven sen per stapled security for 1QFY21.

The performance of the group’s office segment, which comprises the Petronas Twin Towers, Menara 3 Petronas, Menara ExxonMobil and Menara Dayabumi, remained stable, backed by the triple net leases (TNLs) and long-term, locked-in leases.

Its profit before tax (PBT) was reduced marginally to RM117.5 million from RM121.1 million mainly due to accounting adjustments to reflect the extension of the TNL agreements for the Petronas Twin Towers and Menara 3 Petronas for another 15 years up to 2042 and 2041 respectively.

The retail segment represented by Suria KLCC and the retail podium of Menara 3 Petronas saw its recovery delayed with the reimposition of the movement control order (MCO 2.0) which took effect from Jan 13 to March 4, 2021.

Its PBT dropped 43.3% to RM58.5 million from RM103.1 million for the same quarter last year mainly due to the provision of tenant assistance and lower internal digital advertising income during the quarter.

For the hotel segment, Mandarin Oriental, Kuala Lumpur’s (MOKL) pace picked up during the December 2020 festivities but was disrupted by the MCO 2.0 which impacted its performance in January and February 2021, resulting in a loss of RM16.1 million for the quarter.

The group anticipates that the National Covid-19 vaccination Programme will foster a market recovery, but remains cautious as the pandemic persists and the year is likely to be challenging.

“The office segment is expected to remain stable, backed by the triple net lease agreements and long-term leases,” it said.

Meanwhile, MOKL will continue to focus on the domestic market with innovative offerings to boost occupancy and event bookings, while Suria KLCC’s performance is significantly dependent on consumers’ spending behaviour as well as the restrictions imposed to control the Covid-19 pandemic, it said.

Nonetheless, it said, tenants’ sustainability and customers’ safety and well-being continue to be the priorities of Suria KLCC.

KLCCP Stapled Group chief executive officer (CEO) Md Shah Mahmood said the group will continue its recovery efforts and strive to improve its performance to remain resilient to deliver long-term value and sustainable returns to holders of its stapled securities.

“With KLCC as ‘The Place’, we will focus on elevating customer experience, advancing our digital transformation towards a digitally smart, connected and sustainable precinct,” he added.

At the noon break today, shares in the stapled securities were unchanged at RM6.90, valuing the group at RM12.46 billion.

Get the latest news @ www.EdgeProp.my

Subscribe to our Telegram channel for the latest stories and updates 

Click here for more property stories