CRCT sees 41.4% fall in first-half DPU amid Covid-19 rental relief, closures

The CapitaMall Yuhuating in Hunan, China.
The CapitaMall Yuhuating in Hunan, China.PHOTO: CAPITALAND

SINGAPORE (THE BUSINESS TIMES) - CapitaLand Retail China Trust (CRCT) on Wednesday (July 29) posted a distribution per unit (DPU) of 3.02 cents for the half year ended June 30, down 41.4 per cent from the year-ago DPU of 5.13 cents, after capital distribution.

Excluding capital distribution, the year-ago DPU was 5.03 cents. The first half last year included a capital distribution of $1 million arising from the gain from the divestment of the stake in a company which held CapitaMall Anzhen.

Gross revenue for the China shopping mall real estate investment trust fell 7.8 per cent from a year ago to 511 million yuan ($100.6 million) in H1 2020.

The decrease was attributed to rental relief that was extended to tenants affected by the Covid-19 situation, as well as the absence of CapitaMall Erqi's contribution, following the pre-termination of lease of its anchor tenant in Q4 2019 and the completion of divestment in May 2020, the manager said.

This was partially offset by contributions from CapitaMall Yuhuating, CapitaMall Xuefu and CapitaMall Aidemengdun which were acquired on Aug 30, 2019.

In Singapore-dollar (SGD) terms, gross revenue declined 8.7 per cent to $101.5 million, due to the stronger SGD against the yuan.

Net property income (NPI) dropped 17.9 per cent to 328.6 million yuan for the half year, down from 400 million yuan a year earlier.

In SGD terms, NPI decreased 18.6 per cent to $65.3 million, down from $80.2 million for the year-ago period.

According to the manager, CRCT's performance in H1 2020 was affected mainly by the disruptions to mall operations during China's nationwide lockdown to combat Covid-19, and provision of a broad-based tenant relief package to assist with its tenants' business recovery.

Income available for distribution to unitholders slipped 29.7 per cent to $35.3 million.

For H1 2020, CRCT released $3.5 million retained in FY2019 from the compensation received by CapitaMall Erqi, following the exit of its anchor tenant. Simultaneously, $1.8 million was retained from the income available for distribution to unitholders for general corporate and working capital purposes. The retention, which was made in view of "near-term market uncertainties", represents 5 per cent of the income available for distribution to unitholders, the manager said.

As such, distributable amount to unitholders came in at $37 million for the six-month period, down 27.7 per cent from a year ago.

The distribution will be paid on Sept 28, following books closure on Aug 7.

Units of CRCT closed at $1.23 on Tuesday, down $0.03 or 2.4 per cent.