Atrium REIT's 3Q earnings weighed down by higher interest rates and fees

• Going forward, Atrium said the management remains cautious due to the uncertainties surrounding the economic recovery as a result of the global economic slowdown, inflationary pressures and geopolitical risks.

KUALA LUMPUR (Oct 24): Atrium Real Estate Investment Trust's (REIT) net profit for the third quarter ended Sept 30, 2023 (3QFY2023) fell 4.1% year-on-year on higher expenses owing to an increase in finance costs amid the elevated interest rate environment.

The industrial property-focused REIT said managers’ and trustees’ fees were also higher in the quarter, as its net asset value increased following a series of fundraising exercises through a private placement and special issuance.

Net profit dropped to RM5.15 million or 1.94 sen per share for 3QFY2023, from RM5.37 million or 2.39 sen per share a year ago, the REIT disclosed in a stock exchange filing on Tuesday.

However, net rental income rose 3.3% to RM9.06 million for 3QFY2023, from RM8.88 million for 3QFY2022, attributable to a step-up in rental rates and the absence of rent-free amortisation adjustment during the current quarter.

Atrium declared a third interim income distribution of 1.7 sen, with the ex-date on Nov 8, and is set to pay out some RM4.51 million on Nov 30.

For the cumulative nine-month period, Atrium's net profit fell 2.3% to RM15.93 million from RM16.31 million, while revenue grew 3.5% to RM29.58 million from RM28.57 million.

Going forward, Atrium said the management remains cautious due to the uncertainties surrounding the economic recovery as a result of the global economic slowdown, inflationary pressures and geopolitical risks.

Even so, it said, “Despite the uncertainties and challenging market conditions, the manager is of the view that Atrium's portfolio of properties will remain resilient, and is expected to continue delivering a sustainable performance for FY2023.”

Units of Atrium closed one sen or 0.7% higher at RM1.40, giving it a market capitalisation of RM371.77 million.

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