KUALA LUMPUR: Sunway REIT’s 1QFY16 core net profit came broadly within expectations at 22.3% of CIMB Equities Research’s full-year forecast and 23.2% of consensus.
It said on Friday the retail segment revenue grew 7.3% on-year to RM87.0mil while revenue at the hotel segment jumped 21.4% on-year to RM20.6mil. However, office segment revenue dropped 22.0% on-year to RM8.4mil due to lower occupancy.
“Sunway REIT’s 1QFY16 core net profit grew 1.7% on-year to RM64.5mil on the back of a 3.4% on-year increase in revenue to RM117.7mil.
“The 1QFY16 core net profit accounted for 22.3% of our full-year forecast and 23.2% of consensus. We consider this as broadly in line as we anticipate a stronger year ahead due to the expected increase in occupancy rates at its Sunway Putra Mall and Sunway Putra Hotel,” it said.
CIMB Research said the retail segment recorded 7.3% on-year growth in revenue to RM87.0mil in 1QFY16 mainly due to resilient performance from Sunway Pyramid Shopping Mall and contribution from Sunway Putra Mall post its soft opening on May 28, 2015.
“Sunway Pyramid Shopping Mall’s gross revenue grew 4.1% on-year to RM72.0mil, mainly due to higher average net rent per sq. ft. while Sunway Putra Mall’s gross revenue was RM3.3mil for 1QFY16, with secured occupancy of 83.9% as at Sept 30, 2015,” it said.
The hotel segment’s gross revenue jumped 21.4% on-year to RM20.6mil in 1QFY16 due to better performance at all the hotels, except Sunway Hotel Seberang Jaya, and new contribution from Sunway Hotel Georgetown, which was acquired in January 2015.
Gross revenue for Sunway Putra Hotel improved 16.7% on-year to RM1.4mil with the reopening of Sunway Putra Mall and the hotel refurbishment works are expected to be completed in 2QFY16.
However, CIMB Research said the office segment’s 1QFY16 gross revenue dropped 22.0% on-year to RM8.4mil due to lower average occupancy of all office properties but this was mitigated by new contribution from Wisma Sunway, which was acquired in March 2015.
“The office segment is expected to face challenging times ahead due to the high vacancy rate and anticipated longer time and higher cost to secure new tenancies in an oversupplied and weaker market environment,” it said.
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