CapitaLand Mall Trust 2Q2020 Financial Results

CapitaMall Trust

CapitaLand Mall Trust has announced their 2Q2020 financial results on 22nd July 2020. As expected, the financial results were in a sea of red. Retail REITs are the hardest hit by the COVID-19 pandemic due to lock down measures by the government.

Despite phase two reopening, the safe distancing measures have continued to pose challenges. Most tenants have resumed operations and average shopper traffic has
recovered to 53% of the level a year ago. Suburban malls continue to outperform downtown malls.

Gross revenue declined by 39.8% to S$114.1 million. Net property income declined by 48.9% to S$68.1 million. Distributable Income declined 27.5% to S$78.1 million which include the S$23.2 million, part of the S$69.6 million of taxable income available for distribution retained in 1Q 2020 to Unitholders.

2Q2020 Financial Results

2Q2020
(S$’000)
1Q2019
(S$’000)
YoY(%)
Gross Revenue 114,091 189,539 (39.8%)
Net Property Income 68,052 133,152 (48.9%)
Distributable Amount (To Unitholders) 78,128 107,716 (27.5%)
Distribution Per Unit (“DPU”) (cents) 2.11 2.92 (27.7%)

Occupancy

As of 30th June 2020, overall portfolio occupancy stood at 97.7%. With all the tenant support and measures imposed by the government, this has helped malls to maintain the occupancy.

Year to date, CMT has committed to extend tenant support that includes, but is not limited to:

  1. S$154.5 million rental relief package comprising rental waivers from landlord, property tax rebates and cash grants.
  2. Waiver of turnover rent.
  3. Release of one-month security deposits to offset rents; and
  4. Rental relief for qualifying small and medium enterprises tenants.

Debt

Gearing ratio stood at 34.4%. In my opinion, this is at pretty low levels where there is a lot of room for debt and further acquisitions.

100% of the assets remained unencumbered. This is the best thing I like about CapitaLand Mall Trust.

Bank facilities in place for refinancing of debt due in 2020.

CapitaLand Mall Trust Debt Maturity 2Q 2020

Current Dividend Yield

The share price has reflected in the weakness of its 2Q 2020 financial results. Based on the historical payout of 11.97 cents in FY19 and current share price of S$1.98, this translates to a current dividend yield of 6.05%.

CapitaLand Mall Trust Share Price 24 July 2020

Summary

The weak financial results is expected and the share price reacted to the weakness. As the share price declines, this poses another opportunity to nibble more of CapitaLand Mall Trust.

Currently, CapitaLand Mall Trust makes up 9.70% of my stock portfolio and if opportunity allows, I will increase the allocation to 12.0% give my confidence in this REIT.

Believe me or not, the shoppers are coming back to the suburban malls to dine and shop despite the safe distancing measures. Look at the queue that builds up at the entrance of Tampines Mall. I do not see such long queues from other nearby malls such as Tampines One and Century Square.

The below graph plotted by the manager of CapitaLand Mall Trust has shown the gradual recovery of shopper traffic.

CapitaLand Mall Trust Shopper Traffic Recovery

4 thoughts to “CapitaLand Mall Trust 2Q2020 Financial Results”

  1. I just been to IMM and Westgate this Friday afternoon, the crowd is good. Of course it is still lesser than pre-COVID time, but is a very good sign for CMT.

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