KLCCP Stapled’s 3Q net profit flattish at RM181m

By SHAHEERA AZNAM SHAH / Pic By BLOOMBERG

KLCCP Stapled Group, comprising KLCC Property Holdings Bhd and KLCC Real Estate Investment Trust (KLCC REIT), recorded a flattish net profit of RM181.41 million in the third quarter ended Sept 30, 2019 (3Q19) against RM181.43 million last year amid stable income from its office and retail segments.

Revenue for the quarter rose 1.15% year-on-year (YoY) to RM353.52 million from RM349.48 million recorded a year ago, the group said in a statement yesterday.

It proposed a distribution per stapled security of 8.8 sen for the quarter, comprising 2.56 sen for KLCC Property and 6.24 sen for KLCC REIT which is to be paid on Dec 18, 2019.

“The office segment, comprising the Petronas Twin Towers, Petronas Tower 3, Dayabumi Complex and ExxonMobil Tower, continued to generate stable income for the group.

“The asset enhancement initiative at Dayabumi Complex’s lower ground floor to provide higher visibility to retail podium further enhances the building’s connectivity to the surrounding areas and is expected to be completed by year-end,” it said.

The group’s retail segment recorded a 4.38% YoY increase in profit before tax to RM97.3 million in 3Q19 from RM93.2 million previously, boosted by higher rental reversions and increased contribution from internal digital advertising.

“The retail segment, represented by Suria KLCC and the retail podium of Petronas Tower 3, recorded a marginal increase in revenue to RM125.2 million in spite of the ongoing anchor-to-speciality reconfiguration exercise,” it added.

The group expects to remain resilient as it continues to leverage on the long-term profile of office leases.

“Despite the ongoing reconfiguration exercise, the retail segment is expected to remain competitive with its strong fundamentals,” it said.

For its hotel segment, the group anticipates challenging market conditions due to intensified competition from new entries to the market.

“Due to the increased room inventory within KLCC area and new food and beverages (F&B) outlets in the market, the hotel segment is expected to trade in challenging market conditions for the rest of the year,” it said.

The group added that despite improved occupancy rates, its Mandarin Oriental Kuala Lumpur hotel recorded a 3.2% decline in revenue, mainly due to softer demand for F&B and weaker meetings, incentives, conferences and exhibitions events.

“Amid looming uncertainties and the cautiously constructive economic outlook, we remain committed to delivering sustainable income distribution to our holders of stapled securities by ensuring that our assets continue to be attractive and relevant,” KLCC Property Holdings CEO Datuk Hashim Wahir said.