IGB REIT, the owner of the Mid Valley Megamall and The Gardens Mall, posted steep declines in revenue and earnings in the second quarter ended June 30. Gross revenue fell 54% to RM62.0mil compared with RM134.98mil a year ago. Net property income tumbled 62% to RM37.4mil, while profit after tax plunged 75% to RM19.5mil.
The lower gross revenue, net property income and profit after taxation are mainly due to the rental support provided to tenants and lower car park income arising from the Covid-19 pandemic and resultant MCOs.
For the current quarter, IGB REIT’s gross revenue (RM62.0 million) was 50.4% lower compared with the immediate preceding quarter of RM125.0 million. Net property income (RM37.4 million) was 57.7% lower compared with net property income of RM88.4 million in the preceding quarter. Profit after taxation (RM19.5 million) was 71.5% lower compared with the immediate preceding quarter of RM68.4 million.
IGB REIT expects the current sluggish economic and business conditions to result in a material adverse impact on its financial performance this year. This is mainly due to the rental support programme and potential increase in expected credit losses and possible impairment of fair value for investment properties arising from the Covid19 pandemic and resultant MCOs. Since the Recovery MCO started on 10 June 2020, both Mid Valley Megamall and The Gardens Mall have seen an apparent, gradual and cautious increase in footfall and vehicle traffic volume. Notwithstanding the initial recovery indicators, the Directors of the Manager are monitoring the current economic and business situations closely and take appropriate and timely actions to mitigate the impact on IGB REIT’s operations and financial performance.
Despite the grim outlook and many challenges ahead, IGB REIT is determined to stay resilient throughout the Covid-19 pandemic.
source: Bursa Malaysia