PETALING JAYA: Amanahraya Real Estate Investment Trust’s (ARREIT) profit for the first quarter ending March 31, 2020 dropped 4.4% to RM8.70 million from RM9.10 million a year ago mainly due to lower rental income and higher property expenses.
Its revenue decreased 5.3% to RM22.55 million RM23.80 million mainly due the loss of settlement income as per stakeholder agreement which ended on Nov 1, 2019. Interest income and other income drop to RM310,000, a decrease of 7.1% compared with the cumulative preceding quarter.
A total of RM4.8 million was incurred for property expenses during cumulative quarter, an increase of 29.9% as compared to the preceding corresponding period, mainly due to refurbishment cost and maintenance expenses incurred at the properties especially at Vista Tower (pix), Selayang Mall and Dana 13. The net property income were recorded lower at RM17.7 million in comparison to the cumulative preceding quarter of RM20.1 million resulting from higher of property expenses.
On the other hand, total cumulative non-property expenses for the period fell to RM9.35 million mainly underpinned by lower borrowing cost from RM8.4 million in 2019 to RM7.2 million in 2020 due to the settlement of Affin term loan and the decrease in the Overnight Policy Rate in January and February 2020 to 2.5% from 3.0%.
Gearing ratio was 43.74%, reduced from last quarter of 43.81% and well below the regulatory limit of 50.0%.
The manager is continuously ensuring the existing assets within the portfolio are well maintained to ensure the stability of rental income and the trust benefits from capital appreciations.
Apart from that, the manager is actively identifying good assets for new acquisition to continuously improve the yield and further diversify the portfolio to minimise the sectoral risk.
“The strategy of having assets with long-term leases by reputable lessees will continue to be the focus of ARREIT to ensure sustainable return,“ it said.
source https://www.thesundaily.my/business/amanahraya-reit-sees-q1-profit-dragged-down-GM2619585
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