KLCC Property stapled group’s earnings rise 19% in Q2

Petronas Twin Towers is one of the assets under KLCC REIT, which posted earnings of RM115mil in Q2. - EPA pic

KUALA LUMPUR: KLCC Property Holdings Bhd (KLCPP) Stapled Group’s earnings grew 19.2% to RM179.86mil for the second quarter ended June 30, 2015, up from RM150.89mil a year earlier.

This was recorded on the back of a 1.1% drop in revenue to RM329mil.

KLCPP told Bursa Malaysia that the group’s office and retail property property investments, which together contributed about 90% of the group’s profit, both recorded higher adjusted pre-tax profit, achieving growth of 26.7% and 11.8% respectively.

However, its hotel operations (Mandarin Oriental KL) sank into the red, with a loss of RM1.55mil against a profit of RM4.12mil in last year’s corresponding quarter.

Revenue from office rental decreased marginally (0.5%) due to closure of City Point Kompleks Dayabumi for redevelopment.

In contrast, revenue from retail - comprising Suria KLCC and the retail podium of Menara 3 Petronas - rose 5.2% in Q2 due to higher rental rates becoming effective during the quarter.

On the prospects for the current financial year, KLCCP said the directors expected that the office and retail segments would remain stable for the remainder of this year. 

“However, the hotel segment is expected to continue to trade in a challenging environment consequent upon the expected depressed market conditions coupled with the continuing renovation works at the hotel,” it said.

KLCCP’s ordinary shares and the units of the KLCC Real Estate Investment Trust (REIT) - whose portfolio includes Petronas Twin Towers, Menara 3 Petronas and Menara ExxonMobil - are stapled together to create the stapled securities. These stapled securities have been listed on Bursa Malaysia since May 2013.

Of KLCPP Stapled Group’s total profit, RM64.75mil (3.7% growth from a year earlier) was attributable to the company’s equity holders while RM115.11mil (30.2% growth) to non-controlling interests relating to KLCC REIT. 

KLCCP also announced a second interim dividend of 3.02 sen per ordinary share (tax exempt) while KLCC REIT will make a second interim income distribution of 5.32 sen per unit (taxable). The dividend and income distribution will be paid on Sept 18.

KLCCP shares gained 15 sen to close at RM7.29 on Friday.

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