CMMT posts net property income of RM39.4 million for 1Q 2020
Distribution per unit of 0.98 sen for the quarter
Kuala Lumpur, 21 May 2020 – CapitaLand Malaysia Mall REIT Management Sdn. Bhd. (CMRM), the manager of CapitaLand Malaysia Mall Trust (CMMT), announced today a net property income (NPI) of RM39.4 million for the quarter 1 January to 31 March 2020 (1Q 2020), 25.4% lower than the same period last year. This was mainly attributed to the 14-day rental waiver from 18 to 31 March 2020 granted to Affected Tenants1. Distributable income for the quarter was RM20.1 million and distribution per unit (DPU) was 0.98 sen.
Mr David Wong, Chairman of CMRM, said: “COVID-19, a global health emergency has become a pandemic which has created an unprecedented economic crisis worldwide. To curb the spread of the virus in Malaysia, the Government implemented a nationwide Movement Control Order (MCO) from 18 March 2020, followed by a Conditional Movement Control Order (CMCO) from 4 May 2020. To mitigate the economic fallout from these measures, the Government has announced stimulus packages amounting to RM260 billion.”
“CMMT malls have not been spared from the effects of COVID-19. To help our tenants ride out this challenging period, we have committed up to RM35.0 million2 in rental relief for Affected Tenants, on top of passing on the 15% electricity discount announced by the Government to eligible tenants. In solidarity with all stakeholders, the CMMT Board of Directors and CEO have voluntarily opted for a reduction in board fees and salaries, backdated to take effect from 1 April 2020.”
“An oversupply of retail space, particularly in the Klang Valley, has been one of the major issues facing Malaysian mall owners in the last few years. FY 2020 will see even greater challenges, given the economic uncertainty brought on by the pandemic. Notwithstanding the difficult operating environment, the CMMT Board wishes to assure our stakeholders that we are committed to proactively manage our business and will take the necessary measures to strengthen CMMT’s retail ecosystem and ensure long-term viability.”
Ms Low Peck Chen, CEO of CMRM, said: “CMMT’s financial performance in 1Q 2020 was impacted mainly by the 14-day rental waiver granted to Affected Tenants. From 17 May 2020, more than 75% of the portfolio’s tenants have resumed operations under the CMCO. As the COVID-19 situation is still evolving and precautionary measures are expected to ease gradually over time, we foresee continued downward pressure on CMMT’s shopper traffic and tenant sales. The rental relief set aside for Affected Tenants will also weigh down our performance in the coming quarters.”
“To strengthen CMMT’s financial position amidst the uncertainties, we have deferred all non-essential operating and capital expenditure to conserve cash. We will focus on sustaining our portfolio occupancy through proactive lease management.”
“In line with our prudent capital management approach, we have announced a proposed Distribution Reinvestment Plan (DRP), subject to approvals from the authorities and unitholders. The plan will enable unitholders to reinvest all or part of the distributions received into new CMMT units if they decide to participate. Through the DRP, unitholders will be able to increase their CMMT holdings without incurring brokerage fees. CMMT also benefits from unitholders’ participation in the plan as the cash, which would otherwise have been paid as distributions, can be reserved for its working capital and capital expenditure requirements.”
For the safety and well-being of shoppers, tenants, visitors and employees, precautionary measures in accordance with health authorities’ guidelines have been implemented at all CMMT properties. These include temperature screening, increased frequency of cleaning and disinfection in common areas and floor markers to facilitate social distancing. Complimentary parking is also in place until 26 May 2020 to support mall tenants’ businesses.
To support the underprivileged in the community, CMMT and its sponsor, CapitaLand, have distributed COVID-19 care packages worth RM212,000 to about 4,000 children from 80 orphanages as well as 300 needy families in Malaysia.
Rapha's Children Home (above left) and RM Caring Home (above right) received surgical masks, hand sanitisers and groceries as part of the COVID-19 care packages.
Summary of CMMT results
|
1Q 2020 |
1Q 2019 |
Change (%) |
Gross revenue (RM ’000) |
74,532 |
87,905 |
(15.2) |
Net property income (RM ’000) |
39,360 |
52,751 |
(25.4) |
Distributable income (RM ’000) |
20,143 |
34,955 |
(42.4) |
DPU (sen) |
|||
For the period |
0.98 |
1.71 |
(42.7) |
Annualised DPU |
3.94 |
6.94 |
(43.2) |
Annualised distribution yield |
4.9%3 |
6.3%4 |
N.M. |
1 Shopping mall tenants providing non-essential services or supplies that are mandated to close during the MCO and the CMCO.
2 The RM35.0 million rental relief package includes the 14-day rental waiver from 18 to 31 March 2020 and a second tranche of rental relief assistance.
3 Based on closing price of RM0.805 per unit on 20 May 2020.
4 Based on closing price of RM1.11 per unit on 22 April 2019.
N.M. – Not meaningful