SunREIT ends FY23 with profit of RM318 mln
Sunway Real Estate Investment Trust (SunREIT) has ended its financial year 2023 (FY23) with a core net profit (CNP) of RM318.3 million, and a full-year distribution payment of 9.3 sen.
According to the research arm of Kenanga Investment Bank Bhd (Kenanga Research) and MIDF Amanah Investment Bank Bhd (MIDF Research), the REIT’s full-year earnings had met their expectations as it made up 100 and 101 per cent of their full-year FY23 forecasts.
Compared to the previous year, SunREIT’s FY23 revenue grew by 10 per cent thanks to a robust 11 per cent growth in its retail segment which benefitted from consistent retails sales and foot traffic across all of the REIT’s retail malls.
Similarly, the group’s hotel segment also saw a growth surge of 38 per cent due its occupancy rates improving from 54 per cent in FY22 to 64 per cent. The group’s Sunway Resort Hotel which reopened in FY23 has also registered full occupancy since July 2023.
While the growths in its retail and hotel segments were commendable, they were slightly offset by higher utility costs and financing costs that cause their net property income (NPI) margin compression to fall by 3.2 percentage points down to 73.6 per cent.
This caused the group’s CNP growth to come in narrower at a 5 per cent y-o-y growth to RM318.3 million. Meanwhile, the group’s final distribution payment of 9.3 sen translated to a healthy gross yield of 5.8 per cent and was also above expectations as it exceeded Kenanga Research’s full-year forecast of 8.8 sen.
For the year ahead, both research houses expected positive outlook for SunREIT in FY24 supported a steady retail segment and further improvement in its hotel segment as occupancy rates are expected to continue growing with growth in domestic leisure, corporate, and Meetings, Incentives, Conferences and Exhibition (MICE) activities.
Earnings from Sunway Pyramid are also expected to normalise from FY25 onwards after their reconfiguration exercise is completed by the end of FY24. Post-reconfiguration, new and existing tenants could elevate rental yields going forward.
“Additionally, the recent 163 Retail Mall acquisition could present several opportunities for the group in optimising its tenant trade mix and potentially uplift its net yield of 6.5 per cent,” Kenanga Research added.
Kenanga Research forecast SunREIT to register a CNP of RM362.4 million and a dividend per unit (DPU) of 10.6 sen in FY24 while MIDF Research is forecasting the group to register a CNP of RM30 million and a DPU of 9.18 sen.
Both research maintained ‘Buy’ SunREIT.