Sasseur Reit's Q4 DPU drops 18.5% to 1.629 S cents

SASSEUR Real Estate Investment Trust (Sasseur Reit), which owns outlet malls in China, posted a 18.5 per cent decline in its distribution per unit (DPU) to 1.629 Singapore cents for the fourth quarter ended Dec 31, 2019, from 1.999 cents a year ago.

This was due to lower income tax expense in Q4 2018 as a result of utilisation of available tax losses, as well as a one-off adjustment during that quarter relating to statutory reserves set aside during Q2 and Q3 2018, the trust's manager said on Thursday.

Sasseur Reit's rental income under its entrusted management agreements (EMA) fell 9 per cent to S$28.2 million for Q4 2019, from S$30.9 million for the year-ago period.

However, excluding straight-line adjustment, EMA rental income inched up by 0.9 per cent on the year to S$31.5 million from S$31.2 million. This growth was primarily driven by the 1.4 billion yuan (S$279 million) in combined outlet sales generated by its four outlet malls, up 3.4 per cent from a year ago, amid stronger year-end festive promotion efforts.

The increase in EMA rental income, excluding straight-line adjustment, was partially offset by the depreciation of the yuan against the Singapore dollar by 2.7 per cent, Sasseur Reit's manager said.

Income available for distribution to unitholders fell 17.4 per cent year on year to S$19.5 million, from S$23.6 million.

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The DPU of 1.629 Singapore cents for Q4 will be paid out on March 26, after books closure on March 6.

For the full year ended Dec 31, 2019, Sasseur Reit recorded a DPU of 6.533 Singapore cents, which exceeded its initial public offering (IPO) forecast for FY2019 by 4.7 per cent. Income available for distribution for the year was S$77.9 million, likewise outperforming the projection by 4.7 per cent.

However, its full-year EMA rental income came in at S$118 million, which was 1.6 per cent below forecast.

Sasseur Reit listed on the Singapore Exchange on March 28, 2018.

Separately, last month, the manager temporarily closed the trust's four outlet malls in Chongqing, Bishan, Hefei and Kunming as a precautionary measure amid the novel coronavirus outbreak. Sasseur Reit's sponsor has also temporarily closed its seven other outlet malls in China. After the announcement, Sasseur Reit units sank 10.3 per cent that day.

On Thursday, Vito Xu, chairman of the manager, said there has been no infection cases among the 40,000 staff in Sasseur group's 11 malls to date.

Anthony Ang, chief executive officer of the manager, added: "We intend to undertake strategic initiatives to strengthen our online and offline sales channels, and engage tenants, customers and VIP members better."

Sasseur Reit's manager is also exploring asset enhancement opportunities for the Chongqing outlet mall, which is the most mature asset in the trust's portfolio, Mr Ang added.

Units of Sasseur Reit were up S$0.01 or 1.3 per cent to S$0.80 at Wednesday's close.