KLCCP’s net profit flat in 2Q18

In addition, the company’s office segment remains relatively stable at RM149m

By RAHIMI YUNUS & SHAHEERA AZNAM SHAH / Pic By TMR File

KLCC Property Holdings Bhd’s (KLCCP) net profit for the second quarter ended June 30, 2018 (2Q18), remained flat with a 0.6% growth to RM179 million compared to RM178 million in the same period last year, supported by higher revenue recorded across all segments.

Revenue for the 2Q18 stood at RM345 million, up 2.2% from RM338 million a year ago.

The office segment, supported by Menara ExxonMobil’s 100% occupancy since April 2017, remained relatively stable at RM149 million.

The retail segment, which comprises Suria KLCC and the retail podium of Menara 3 Petronas, saw a marginal increase in revenue of 1.2% to RM123 million on higher rental rates and sustained occupancy rate.

“Suria KLCC added nine new tenants in the first half of 2018 including Tom Ford’s first in Asia standalone boutique,” it said in a filing to Bursa Malaysia yesterday.

In addition, the hotel segment represented by Mandarin Oriental Kuala Lumpur (MOKL) recorded a 7.2% year-on-year (YoY) revenue growth to RM37.2 million — backed by its higher average room rate as a result from higher demand for the newly renovated guest rooms.

MOKL has completed renovations for 561 rooms, while its second phase refurbishment of the guest rooms is expected to be fully completed by 3Q18.

However, between 2Q18 and its preceding quarter, KLCCP noted the pretax profit for the hotel segment decreased by 0.5% due to the occupancy rate in the festive months, as well as the loss of banqueting events post-14th General Election.

The revenue in the management services division rose 5.5% YoY to RM53.6 million, contributed by the new contracts and one-off works under the facilities management.

KLCCP declared a 5.65 sen second interim dividend for 2Q18, while its arm’s KLCC Real Estate Investment Trust declared a 3.05 sen dividend, which represents a total payout of RM157 million to be paid out to entitled shareholders on Sept 30 this year.

KLCCP noted in the statement that the company will remain focused on sustaining its growth and expects its overall performance, anchored by the long-term leases of the office segment, to remain stable.

Its retail segment is forecast to remain resilient amid the challenging market environment, while the hotel segment is expected to continue to benefit from the newly renovated guest rooms moving forward.

“The board expects KLCCP’s performance to remain stable on the back of long-term lease arrangements.

“The retail segment is expected to remain resilient, while the hotel segment is expected to benefit from the newly refurbished rooms as its segment will continue to operate in a competitive environment as a result of an increase in its market’s room inventory,” it said.