CRCT – BT

CRCT’s Q2 distributable income rises 30.4%

CAPITALAND unit CapitaRetail China Trust (CRCT) yesterday said that its second-quarter distributable income rose 30.4 per cent to $10.5 million, from $8.1 million a year ago, on the back of a new acquisition.

Distribution per unit (DPU) was 1.70 cents – the same as in Q2 2007.

CRCT decided to retain $900,000 of its income available for distribution in Q2 2008 ‘to be prudent’, it said. This is meant to help negate the fluctuating income flow in the second half of 2008, thereby providing unit-holders with stable half-yearly distributions in 2008. If the trust had distributed 100 per cent of its income, the DPU in Q2 2008 would have been 1.84 cents.

For the whole of the 2008 financial year, CRCT ‘remains committed to distribute 100 per cent of its income available for distribution’, the trust said.

Net property income for Q2 2008 was $16.6 million, an increase of 33.1 per cent over the $12.4 million recorded in the corresponding three months in 2007 – partly due to income from Xizhimen Mall, the newest addition to CRCT’s portfolio.

The real estate investment trust (Reit), however, saw its net property income for Q2 2008 come in slightly under its own forecast, which it attributed to the strengthening Singapore dollar.

Net property income of $16.6 million was 0.5 per cent lower than the forecast $16.7 million. But in yuan terms, the trust outperformed its forecast. Net property income was 84.4 million yuan (S$16.9 million), 0.4 per cent higher than the forecast 84.1 million yuan.

For the first six months of 2008, CRCT’s distributable income rose 26.8 per cent to $19.3 million, from $15.2 million for the corresponding period in 2007. DPU for H1 2008 rose 1.2 per cent to 3.25 cents, from 3.21 cents a year ago.

The trust increased the occupancy at its malls to 97.1 per cent as at June 30, 2008, from 95.6 per cent at the beginning of the year.

Lim Beng Chee, chief executive of CRCT’s manager, acknowledged that China’s inflation rate, which is estimated to reach 6.5 per cent in 2008, is a concern.

But the trust is still confident of keeping operating expenses within forecasts, he said.

‘Most of our costs have been locked in earlier, so for 2008, we will still be able to meet (earnings) forecasts,’ Mr Lim noted. But the cost of utilities, one of the biggest expenses for the Reit in China, remains a concern, he added.

The trust’s current $1.2 billion portfolio consists of eight retail malls located in five cities in China.

CRCT’s shares closed two cents down at $1.14 yesterday. The stock has shed 47.0 per cent since the start of the year.