’s (Pavilion REIT) net profit for the financial year ended Dec 31, 2020 (FY20) fell to RM46.34 million from RM262.63 million posted in the preceding year.Revenue declined by RM75.1 million or 13 per cent to RM510.22 million from RM585.35 million previously, mainly due to non-renewal of some expired tenancies.
In a filing with Bursa Malaysia today, Datuk Philip Ho, chief executive officer of Pavilion REIT Management Sdn Bhd, the manager of Pavilion REIT, said based on global reports, the retail outlook is expected to revert back to some form of normality this year.
"If the (pandemic) curve can continue to flatten in Southeast Asia and with the vaccines being delivered in the first quarter of 2021, we are confident that the retail industry will recover and grow in the year ahead,” he said.
The manager is committed to continuing to improve performance and support its tenants while adopting prudent capital management.
It said the distributable income of 2.52 sen for the second half of 2020 will be paid on Feb 26, 2021, resulting in a full year distribution of 4.13 sen or RM125.6 million.
Meanwhile, Pavilion REIT said percentage rent, marketing events and advertising income were badly affected and recorded lower income as compared to preceding year-to-date Dec 31, 2019, due to the government’s various restriction of movement orders.
"Total property operating expenses incurred was higher by RM66.5 million or 32 per cent compared with the preceding year.
"This is mainly due to rent rebates given to tenants that were not providing essential services and supplies during the Movement Control Order (MCO), further rebates given to tenants during the recovery MCO and conditional MCO, and higher provision for doubtful debts,” it said.
The higher cost was also due to, among others, regular sanitisation of malls, purchase of hygiene equipment and tools, and contributions made to the government to support the fight against the COVID-19 pandemic, it added.