KLCC 3Q2020 quarterly report is released. Let’s take a look at the financial data first and compare it with the same period in 2019:

  • Revenue fell 11.6%, 3Q2020 was RM312.6mil, 3Q2019 was RM353.5mil
  • Operating profit fell 15.2%, 3Q2020 was RM215.2mil, 3Q2019 was RM253.7mil
  • Distribution per unit fell 14.77%, 7.5cent(RM) in 3Q2020, 8.8cent(RM) in 3Q2019

KLCC declared a dividend of 7.5cent(RM) per unit, Ex-date 24/11/2020, payment date 18/12/2020

Compared with 2Q2020, 3Q2020 KLCC performed much better, take a look at the comparison of 2Q2020:

  • Revenue increased by 17%
  • Operating profit increased by 18.24%
  • DPU remains at 7.5cent(RM) per unit

Since 3Q performs better than 2Q, why does the dividend remain at 7.5 cents (RM) per unit? In fact, 3Q’s EPS is 8.8cent(RM) per unit, while 2Q only has a modest 7.78cent(RM) per unit. In other words, the payout ratio for this quarter is less than that of 2Q2020.

In 3Q2020, KLCC’s Retail segment rebounded vigorously, and retail operating profit increased to RM82.8mil (2Q2020 Retail operating profit: RM54.9mil). At the same time, the operating profit loss of the hotel segment also narrowed to negative RM12.9mil (2Q2020 hotel operating profit: RM-16.8mil) while the office segment operating profit remained approximately RM132.6mil.

The management service’s operating profit, including car park income, has returned to the 2019 level of approximately RM16.9mil.

The management of KLCC stated that 3Q2020 reserves some funds to assist Retail tenants, and the hotel business will not be good due to the lack of foreign tourists.

KLCC’s finance cost is about the same as in 2019. I wonder when KLCC plans to restructure its debt and reduce the cost of borrowing.

Regarding the forecast for the next quarter, Malaysia is currently in CMCO and expects that KLCC’s DPU will be approximately 7.5 cents (RM) per unit in 4Q2020.

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