Sasseur Reit cuts Q2 DPU by 6% after posting lower year-on-year sales

SASSEUR Real Estate Investment Trust (Sasseur Reit), which owns outlet malls in China, posted a 6 per cent drop in its distribution per unit (DPU) to 1.512 Singapore cents for its second quarter ended June 30, 2020, from 1.608 cents a year ago.

The Reit's rental income under its entrusted management agreements (EMAs) rose 1.4 per cent to S$30.3 million for the quarter, from S$29.9 million the year before, according to the Reit's results released on Friday.

Excluding straight-line adjustment, EMA rental income was down 4 per cent to S$28 million, from S$29.1 million a year ago, cushioned by the fixed component of EMA rental income as structured in the Reit's EMA.

Income available for distribution declined 5.2 per cent year on year to S$18.2 million from S$19.2 million. The decrease was mainly due to lower sales and a one-off reversal of trust expenses in Q2, partially offset by lower finance costs and lower tax expenses.

The distribution will be paid out on Sept 25, after books closure on Aug 31.

Meanwhile, for the half year ended June 30, 2020, DPU was 12.8 per cent lower at 2.846 Singapore cents, versus 3.264 cents a year ago. Income available for distribution fell 12.1 per cent to S$34.2 million from S$38.9 million.

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EMA rental income was down 4.4 per cent to S$58 million from S$60.6 million. Excluding straight-line adjustments, EMA rental income declined 11.3 per cent to S$53.2 million from S$60 million.

On its outlook, the manager of Sasseur Reit said the remaining quarters of 2020 will deliver stronger performances and sales will return to pre-pandemic levels as the situation in China continues to improve.

Anthony Ang, chief executive of the Reit's manager, said the EMA income model was "vital" in mitigating the negative impact on sales during the Covid-19 outbreak.

"Our intensified efforts to engage with both tenants and customers have also paid off, as our footfall and sales figures continue to recover," he said.

Units of the Reit closed S$0.01 or 1.3 per cent higher at S$0.77 on Thursday.