CapitaLand’s beats expectations with earnings of RM111 mln
KUCHING: CapitaLand Malaysia Trust’s (CLMT) financial year 2023 (FY23) core net profit of RM111.2 million and distribution per unit (DPU) of 4.17 sen has beaten the expectations of the research arm of Kenanga Investment Bank Bhd (Kenanga Research).
In a results note, the research arm reported that the group’s FY23 CNP of RM111.3 million had beat their full-year forecast by 11 per cent.
They guided that the positive variance was due to an underestimation of CLMT’s retail-driven revenue which grew by 43 per cent year on year (y-o-y) due to additional contribution from its Queensbay Mall which was acquired in March 2023 as well as higher occupancy and positive rental reversions from its other assets
For FY23, CLMT’s overall occupancy rate grew by 6.7 percentage points (ppt) to 92.6 per cent while also registering a positive rental reversion of 7.5 per cent.
Additionally, a fair value adjustment contributed to a 119 per cent increase in the group’s net investment income which boosts its pre-tax profit by 249 per cent y-o-y.
After adjusting for these gains, CLMT’s FY23 CNP and distributional income has come in at RM111.2 million and RM109.8 million which translated to respective growths of 24 and 26 per cent.
Looking ahead, while there are some concerns of heightened competition among malls in the Klang Valley due to increased supply, Kenanga Research noted that CLMT had registered a notable increase in tenant sales and shopper traffic of 8 and 25 per cent in FY23.
“This showcases the group’s adaptability to changing consumer trends through robust retail activities,” they said.
Meanwhile, the group’s disposal of the 3 Damansar Office Tower which was finalised in Dec 2023 is consistent with their ongoing portfolio reconstitution strategy of relocating capital into more lucrative opportunities in the industrial sector.
“The group expresses optimism in its logistics sector, with third-party logistics and ecommerce playing pivotal roles in expanding their operations via the Glenmarie Distribution Centre, likely to be tenanted by the second half (2H) of FY24,” they added.
“Its less primed asset profile amid the uncertain economic outlook and elevated inflationary environment may put a strain to tis retail-centric portfolio going forward.”