KUALA LUMPUR: Capitaland Malaysia Mall Trust’s (CMMT) latest financial results have came in line with Maybank Investment Bank Research expectations.
The research house said CMMT’s 4Q16 results and second interim gross dividend per unit of 4.23sen were in line.
It said in 4Q16, positive rental reversions across key malls and sustained occupancy rates have negated weaker rental income from Sungei Wang Plaza due to negative rental reversions.
Maybank said excluding revaluation gains (RM1.5mil), CMMT’s 4Q16 core net profit was RM40.9mil, bringing FY16 core net profit to RM163.7mil.
It said the results came in 99%/97% of the house and consensus’ FY16 estimates respectivel..
It added that the 4Q16 earnings were largely supported by higher rental rates from positive rental reversions namely at Gurney Plaza and East Coast Mall, and sustained occupancy rate, which offset slower rental income from Sungei Wang Plaza due to negative rental reversions as the mall continues to be affected by the ongoing Klang Valley Mass Rapid Transit (KVMRT) 1 works.
Meanwhile, quarter-on-quarter earnings were impacted by higher maintenance expenses whereby property operating expenses increased by 3% quarter-on-quarter.
“We tweak FY17-18 earnings forecasts by less than 1% per annum but maintain our dividend discount model -target price of RM1.55 (cost of equity: 8.2%),” Maybank said.
The research house expects Sungei Wang Plaza’s rental income growth to remain muted in the near-term.
“However, we believe the completion and opening of the KVMRT 1 line by mid-2017 could improve shopper traffic in the long-run while the portfolio is still backed by Gurney Plaza and East Coast Mall’s favourable rental income growths,” it said.
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