KUALA LUMPUR, Aug 6 (Bernama) -- KLCCP Stapled Group reported a revenue of RM267.2 million for the second quarter of financial year 2020, lower by 24% Year-on-Year (YoY) whilst Profit Before Tax (PBT) dropped by 30% to RM163.8 million due to the sharp decline in the performance of the hotel and retail segments, arising from the unprecedented Covid-19 pandemic and the Movement Control Order which commenced from since 18 March 2020.
 
For the cumulative six-month period from 1 January to 30 June 2020, the Group recorded a revenue of RM621.8 million, lower by 11.7% as compared to the first half of 2019 while PBT dropped 16.4% to RM396.1 million.
 
For the second quarter 2020, KLCCP Stapled Group’s distributed 7.50 sen per stapled security, reflective of the overall performance of the Group for the second quarter 2020. This amounted to a total dividend payment of 15.80 sen for the first half of 2020.
 
Navigating the impact and challenges of Covid-19 crisis
 
The office segment comprising the PETRONAS Twin Towers, Menara 3 PETRONAS, Menara ExxonMobil and Menara Dayabumi, remained resilient, underpinned by its full occupancy and long-term locked-in leases.  The segment recorded a marginal increase in PBT to RM121.1 million with stable revenue of RM149.1 million as compared to the corresponding quarter. 
 
The retail segment, represented by Suria KLCC and the retail podium of Menara 3 PETRONAS were impacted by the prolonged MCO which resulted in a decline in revenue and PBT of 41.4% and 50.0% respectively.  This was mainly due to the provision of rental assistance to tenants in respond to the MCO and lower internal digital advertising income.  To-date, Suria KLCC has fully resumed operations and is focusing on efforts in driving customer footfall and tenant sales.  Through its various rewards programmes with active tenant participation, Suria KLCC is seeing a gradual but steady growth in footfall, in line with the market and anticipates the pick-up to further improve upon the return of all surrounding office tenants as well as the re-opening of the borders for international travel.
 
In the hotel segment, the severe impact from Covid-19 resulted in Mandarin Oriental, Kuala Lumpur (MOKL Hotel) recording a YoY decline in revenue of RM38.4 million which led to a loss of RM20.4 million.  In compliance with the MCO, the hotel scaled down operations, limiting it to only essential services for existing guests.  The enforcement of the MCO, coupled with the global travel restrictions and cancellations and postponement of meetings, incentives, conferences and exhibition (MICE) events have led to a sharp decline in occupancy and demand for event space.  Since the resumption of business in May 2020, MOKL Hotel has seen encouraging return of its customers and hotel guests with the re-opening of restaurants, spa, fitness centre and its meeting facilities.  In keeping with the momentum, MOKL Hotel continues to intensify digital marketing efforts to capture domestic tourism through locally designed staycation packages and advance purchase promotions to further strengthen brand exposure.
 
The management services segment comprising facility management and car parking management services recorded an increase in revenue of 13.7% mainly from the new business approach in facility management. However, PBT saw a reduction of 17.5% arising from the lower income from car parks due to the significant reduction in transient parking during the MCO.
 
Prospects
 
The Group expects the performance of the office segment to continue to remain stable backed by the long term tenancies. While the re-opening of Suria KLCC has recorded a positive sales turnover in the month of June, the Group remains cautious, noting the diminishing consumer’s spending power as a result of increasing unemployment rate and the surrounding offices have yet to fully reopen.  The Group opine that the retail segment will remain challenging for the rest of the year.   The hotel segment, meanwhile will continue to be affected as Malaysia’s border remain closed with large gatherings and events still restricted.  The Group expects the hotel segment will continue to operate in challenging environment in the second half of the year.
 
“The unprecedented Covid-19 outbreak has significantly impacted the Group’s performance in the second quarter of 2020.  As a solutions partner, we have been supportive towards our affected tenants at Suria KLCC by extending rental assistance to ensure business continuity and sustainability.  The full re-opening of our businesses is showing a positive trend towards recovery and we will continue our focus to regain the momentum to continue to create long-term value for our holders of Stapled Securities.”
 
“While we continue to focus on navigating the challenges, our priority has always been to protect the health and safety of our people, tenants, customers and hotel guests and ensuring compliance to the guidelines set out under the Covid-19 Standard Operating Procedures.”
 
Datuk Hashim Wahir, Chief Executive Officer, KLCC Property Holdings Berhad
 
About KLCCP Stapled Group
 
KLCC Property Holdings Berhad (KLCCP) and KLCC REIT, collectively known as KLCCP Stapled Group is Malaysia’s largest self-managed stapled security that invests, develops, owns and manages a stable of iconic and quality assets.
 
KLCCP Stapled Group became the first ever Shariah compliant stapled structure in Malaysia upon the listing of KLCC Stapled Securities (KLCCSS) on 9 May 2013.  As a constituent of the FBM KLCI Index, KLCCSS trades under the REIT sector of the Index as a single price quotation.
 
With KLCCP Stapled Group’s core business in property investment and development, the Group has a diverse property portfolio largely located within the Kuala Lumpur City Centre comprising prime Grade A office buildings, a premier retail mall and a luxury hotel.  The stabilised and wholly-owned assets namely PETRONAS Twin Towers, Menara ExxonMobil and Menara 3 PETRONAS are under KLCC REIT and the non-wholly owned assets and assets with development and redevelopment potential, Suria KLCC, Mandarin Oriental, Kuala Lumpur hotel and a vacant land (Lot D1) are in KLCCP.  KLCCP also has a 33% stake in Menara Maxis. 
 
 Two of KLCCP’s wholly-owned subsidiaries, namely KLCC Urusharta Sdn Bhd and KLCC Parking Management Sdn Bhd, are engaged in providing facility management services and car parking management services respectively.  The REIT Manager who is engaged to manage and administer KLCC REIT is internal and resides within KLCCP as a 100% owned subsidiary. 
 
Issued by:
Corporate Communications
Investor Relations and Business Development Department
 
5 August 2020
 
SOURCE: KLCC Property Holdings Berhad

FOR MORE INFORMATION, PLEASE CONTACT: 
Name: Ms. Bindu Menon
Head, Investor Relations and Business Development 
KLCC Property Holdings Berhad
Tel:  +603 2783 7291  
Email:  bindu@klcc.com.my

Name: Ms. Yasmin Abdullah
Corporate Communications
Investor Relations and Business Development Department
KLCC Property Holdings Berhad
Tel: +603 2783 7584 
Email: yasmina@klcc.com.my

--BERNAMA