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Quarterly Report For The Fourth Quarter Period Ended 31 March 2017

Financials Archive

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Condensed Consolidated Statement Of Comprehensive Income

Condensed Consolidated Statement Of Financial Position

Review of Performance

Quarter Results (1Q 2017 vs 1Q 2016)

The Group recorded gross revenue of RM92.4 million in 1Q 2017, a decrease of RM1.2 million or 1.3% against 1Q 2016. The decrease was mainly due to negative rental reversions from Sungei Wang Plaza ("SWP"), as SWP continues to be temporarily affected by the ongoing Mass Rapid Transit works and the closure of BB Plaza. Lower gross revenue was recorded for The Mines and Tropicana City Property ("TCP") mainly due to lower rental rates and occupancy. The decrease was mitigated by better performance from Gurney Plaza ("GP") on the back of higher rental rates achieved from new and renewed leases.

Property operating expenses for 1Q 2017 were RM32.7 million, a decrease of RM0.3 million or 1.0% against 1Q 2016. This was mainly attributed to lower utilities consumption and marketing expenses. The decrease was offset by higher maintenance expenses as a result of the increase in service charge at SWP .

The net property income for 1Q 2017 of RM59.7 million was 1.5% lower than 1Q 2016.

Finance costs for 1Q 2017 of RM14.7 million were RM0.1 million or 0.5% lower than 1Q 2016. The decrease in finance costs was mainly due to the lower average cost of debt and commitment fees, partly offset by higher interest expenses from additional revolving credit facilities drawn down for capital expenditure works. Average cost of debt for 1Q 2017 was 4.39% p.a. (1Q 2016: 4.50% p.a.).

CMMT has incurred RM3.9 million of capital expenditure during the quarter. This includes tenancy works at TCP and the new asset enhancement works on Basement 1 at GP which commenced during the quarter.

Overall, distributable income to unitholders for 1Q 2017 was RM42.3 million, a decrease of RM0.6 million or 1.4% against 1Q 2016.

Financial Year-to-date Results (YTD 2017 vs YTD 2016

Review of financial year-to-date results is the same as above.

Commentary on Prospects

The Malaysian economy grew 4.2% in 2016, anchored by domestic demand that was supported mainly by private sector spending. With the gradual improvement in global growth, recovery in global commodity prices and the continued growth of domestic demand, the Malaysian economy is projected to register a sustained growth of 4.3% to 4.8% in 2017 (source: Bank Negara Malaysia Annual Report 2016). Retail sales growth is expected to remain challenging, with a recovery to be expected only in the second half of 2017 (source: Malaysia Retail Group Industry Report, March 2017).

Meanwhile, the scheduled completion of new retail supply in 2017 is expected to further intensify the competition level for shopping malls, particularly those in the Klang Valley. Amidst concerns about rising costs of living and a challenging operating environment, the Manager expects consumer and business sentiments to remain cautious this year. To ensure that CMMT malls continue to be relevant and attractive to shoppers, the Manager will leverage on its proven track record in proactive asset management and retail management to continually refresh its assets, introduce new-to-market brands and organise unique marketing initiatives. The Manager also expects the scheduled commencement of the Sungai Buloh-Kajang Mass Rapid Transit line in the second half of 2017 to benefit Sungei Wang Plaza in the long term.

With quality assets located in key urban centres across Malaysia comprising mainly of malls focused on necessity shopping, the Manager is confident that CMMT's portfolio is well-positioned to sustain its performance through different economic cycles and is committed to deliver long-term and sustainable income distributions to unitholders.

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