Sunway REIT's 1Q net profit dips to RM86.98mil on absence of Sunway Medical Centre


KUALA LUMPUR: Sunway Real Estate Investment Trust (REIT) experienced a lower contribution from its services segment in the first quarter ended March 31, 2024, following the disposal of Sunway Medical Centre (Towers A and B) in August last year.

In a filing with Bursa Malaysia, the REIT reported a lower net profit of RM86.98mil in the first quarter ended March 31, 2024, as compared to RM96.46mil in the year-ago quarter.

The REIT said in comments accompanying the results that the lower bottomline was also owing to higher property operating expenses for the retail segment.

In addition, the REIT incurred higher finance costs due to the higher average interest rate of borrowing of 3.85%, against 3.6% in 1Q23.

Revenue during the quarter dipped to RM178.59mil from RM182.8mil in the comparative quarter.

Earnings per share slipped to 2.39 sen from 2.67 sen previously.

By segment, the REIT said its hotel and office segments saw increased contributions in both revenue and net profit income with improvements in tourism activity and a stable occupancy rate respectively.

Meanwhile, its retail segment experienced a drop in profitability due to higher marketing cost for festive decorations in Sunway Pyramid Mall and marginal allowance for doubtful debts.

The industrial and others segment saw a sharp increase in contribution due to Sunway REIT Industrial - Petaling Jaya 1 no longer being vacant.

On prospects, the REIT said its retail segment is expected to be marginally impacted in FY24 due to the ongoing asset enhancement initiatives at of its major retail malls, although this will be partially cushioned by new rental contribution from the six hypermarkets.

However, it said its hotel segment stands to benefit from the location of its hotels, which are in proximity to Sunway Medical Centre and surrounding medical centres.

"Given these positive factors, the Manager is confident in a sustainable growth trajectory for the hotel segment in FY2024, supported by full-room inventory at Sunway Resort Hotel," it said.

As for the office segment, the REIT said contribution will remain stable in FY24 although the rental rates and occupancy rates for the segment will remain challenging.

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Sunway REIT , property , hotel , retail , services

   

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