KLCCP Stapled Group Sees Partial Recovery In Q3, 2020


KLCCP Stapled Group posted a stronger third quarter performance compared to quarter two of this year with revenue and PBT increasing 17.0% and 19.3% respectively. This was contributed by a steady recovery in the retail and hotel segments during the quarter.  However, the prolonged challenging operating environment due to the Covid-19 pandemic saw the Group’s year-on-year revenue and PBT performance for the quarter decline by 11.6% and 16.9% respectively in comparison to quarter three, 2019.

The ongoing pandemic and the various phases of lockdown which came into effect from 18 March 2020 has impacted the 9-month performance for the period ended 30 September 2020 with year-to-date revenue declining 11.7% to RM934.4 million and PBT to RM591.6 million.

Despite the headwinds and the challenges faced, the Group delivered stable returns to its holders of stapled security with a distribution of 7.50 sen per stapled security for the quarter, bringing the total dividend distribution for the cumulative nine months of 2020 to 23.30 sen.

Recovery post Movement Control Order in the Third Quarter

The office segment comprising the PETRONAS Twin Towers, Menara 3 PETRONAS, Menara ExxonMobil and Menara Dayabumi, continued to anchor the Group’s performance, backed by its long-term tenancies and full occupancy of all office buildings. The segment registered a marginal increase in PBT to RM121.6 million with a stable revenue of RM149.7 million as compared to the preceding quarter, mainly due to higher share of profit received from associate company.

Following the lifting of the Movement Control Order (MCO) on 4 May 2020 and the re-opening of businesses, Suria KLCC saw a gradual recovery in performance during the quarter. Revenue and PBT increased by 42.1% and 57.7% respectively from quarter two, 2020 amidst cautious consumer sentiment.  However, the earnings were impacted by the rental assistance and lower internal digital advertising income.  Compared to quarter three, 2019, revenue and PBT saw a decline of 15.0% and 23.0% respectively.  

Despite the challenging market conditions, Suria KLCC stayed true to its tagline of “Always Something New” with six new tenants onboard during the quarter which included four first-to-market tenants who made their first presence in the country – BAPE and its BAPE Café – the first one of its kind in the world;  A. Lange & Sohne;  Berluti and   Dragon-i with its first halal restaurant.

Quarter three, 2020 also saw the hotel segment regaining its momentum, achieving a revenue of RM11.7 million from RM3.5 million in quarter two, 2020.  The improved performance was mainly contributed by higher F&B and banqueting demand, good traction from the staycation promotions and activation of digital marketing initiatives to strengthen brand visibility.  Mandarin Oriental, Kuala Lumpur’s (MOKL Hotel) third quarter performance however remained adversely affected by the pandemic which saw its year-on-year revenue decline 73.6% resulting in a loss of RM16.3 million.

In the management services segment, which comprises facility management and car parking management services, higher revenue was recorded during the quarter which saw an increase of 17.8% compared to quarter three, 2019.  This increase was mainly due to the new business approach in the facility management services. PBT, however, was impacted due to lower profit margin and lower carpark income resulting from the reduced number in transient parking due to the pandemic and the extended Recovery Movement Control Order (RMCO).