ore income: CapitaLand’s higher revenue is due to better performance from Gurney Plaza in Penang.

PETALING JAYA: Mall operator CapitaLand Malaysia Mall Trust (CMMT) posted a 52% drop in net profit to RM42.77mil or 2.11 sen per share for the second quarter ended June 30, 2016 from RM88.63mil or 4.98 sen per share in the same quarter a year ago.

This was achieved on the back of a 15.6% hike in revenue to RM92.01mil.

A dividend of 4.2 sen has been declared for the quarter under review.

For the six months to June 30, CMMT’s net profit fell 34% to RM83.82mil from RM126.87mil a year ago, on a 15.6% increase in revenue to RM185.65mil.

In a filing with the stock exchange, CMMT said the increase in revenue was mainly driven by contribution from Tropicana City Property (TCP), acquired in the third quarter of 2015, and a better performance from Gurney Plaza and East Coast Mall on the back of higher rental rates from new and renewed leases.

“The above was offset mainly by a lower contribution from Sungei Wang Plaza due to negative rental reversions as the mall continues to be temporarily affected by the ongoing mass rapid transit works and the closure of BB Plaza,” said CMMT.

The lower revenue from The Mines was due to the absence of one-off income from utilities recovery in the second quarter of 2015.

Meanwhile, it said property operating expenses for the second quarter were RM32mil, an increase of RM4.8mil or 17.6% from the same period a year ago, mainly due to TCP’s operating expenses.

During the period, the net property income was 14.5% higher at RM60mil than the previous quarter, on top of a net fair value gain of RM2.6mil on investment properties.

CMMT said its finance cost was also up by 31.7% to RM14.8mil from a year ago, due to the term loan being drawn down to part-finance the acquisition of TCP, and the additional revolvng credit facilities being drawn down for capital expenditure (capex).

While CMMT had incurred RM11.2mil in capex during the quarter, the average cost of debt for the quarter was 4.50% per annum compared with 4.49% a year ago.

The capex included expenses on mall network infrastructure and tenancy works.

Commenting on CMMT’s performance in a separate release, CapitaMalls Malaysia REIT Management chairman David Wong said retail sales for the first quarter decreased 4.4% from the high base in the first quarter of 2015 due to consumers rushing to buy goods before the implementation of the goods and services tax.

“The gradual increase in the prices of goods and services this year has reduced consumers’ spending power.

“With the uncertain economic climate, we expect consumer and business sentiments to remain cautious for the rest of the year, as concerns over the rising cost of living persists,” said Wong.

Notwithstanding that, it believes its portfolio of well-diversified malls will continue its stable performance.