Central Pattana lifts profit by 8 per cent
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Central Pattana Public Company (CPN) had a second-quarter consolidated net profit of THB2.4 billion (US$74.6 million), up 8 per cent year on year.
Total revenues grew by 6 per cent to THB7.62 billion.
CPN, which manages 30 shopping malls, says its performance was resilient as its has continually placed great emphasis on effective revenue generation from new malls, asset enhancement and efficient management of running costs.
At the end of the quarter, the occupancy rate for its retail properties remained high at an average of 92 per cent, slightly lower that the first quarter’s 93 per cent because of major renovations at CentralWorld and CentralPlaza Rama 3.
For the second quarter, the average rental rate of all retail properties was THB1636 a
sqm/month. Same-store rental growth was primarily driven by rental rate growth with lower discounts in most projects, especially at CentralPlaza Chiang Rai with double-digit rental growth after contract renewal, together with impressive rental growth at CentralMarina after a renovation.
“For the first half, CPN had 6 per cent growth in total revenues and a 12 per cent leap in net profit.”
Excluding new and renovated projects, same-store rental revenues for the quarter grew by about 3.4 per cent, while effective costs management resulted in a higher gross profit ratio of 50.1 per cent, says the group.
It attributes the strong performance to several factors:
- The CentralPlaza Nakhon Si Thammarat shopping mall launched in July last year, which had an occupancy rate of 88 per cent at the end of the quarter.
- Asset enhancement, including CentralMarina (previously Central Center Pattaya) being inaugurated in December after a six-month renovation, with its occupancy rate reaching 90 per cent by the end of the quarter; plus a Food Destination Zone, incorporating a supermarket, being added at CentralPlaza Bangna, CentralPlaza Chaengwattana, CentralMarina and CentralFestival Phuket.
On a quarterly basis, CPN had a 1 per cent drop in total revenues partly because of projects under renovation (especially CentralWorld), higher administrative expenses with the engagement of new senior-management staff members in preparation for expansion, and higher marketing and promotional expenses. As a result, net profit declined 11 per cent quarter on quarter.
For the first half, CPN had 6 per cent growth in total revenues and a 12 per cent leap in net profit. Excluding new and renovated projects, same-store rental revenues grew by about 3.4 per cent.
Meanwhile, CPN has participated in Malaysia’s Central i-City project as its pioneering shopping complex abroad. This is by way of a JV in which CPN, through subsidiaries, holds a 60 per cent stake. Its wholly owned subsidiary I-R&D holds the balance. The project is scheduled to launch next year. CPN has already secured key anchor tenants.
Also, the board has approved entering into a JV to develop a theme park project in central Phuket, while CPN and Dusit Thani Public Company will jointly invest in a mixed-use development project in Bangkok including a shopping mall.
Questions & Answers
Q.Why did the company's net profit decline quarter on quarter, despite annual growth?
Why did the company's net profit decline quarter on quarter, despite annual growth?
Net profit declined due to projects under renovation, particularly CentralWorld, alongside higher administrative expenses from new senior-management staff and increased marketing and promotional costs. These factors contributed to an 11 per cent drop quarter on quarter.
Q.What caused the slight reduction in the average occupancy rate for retail properties?
What caused the slight reduction in the average occupancy rate for retail properties?
The average occupancy rate for retail properties dropped slightly from 93 per cent to 92 per cent. This was due to major renovations taking place at CentralWorld and CentralPlaza Rama 3 during the quarter.
Q.Which projects contributed to the company's strong performance, and how?
Which projects contributed to the company's strong performance, and how?
The strong performance was attributed to the CentralPlaza Nakhon Si Thammarat shopping mall, launched last July, and asset enhancement at CentralMarina, which included a renovation and re-inauguration in December. These projects achieved high occupancy rates.
Q.What are the company's future expansion plans mentioned in the article?
What are the company's future expansion plans mentioned in the article?
CPN plans to launch its pioneering Central i-City project in Malaysia next year, holding a 60 per cent stake in the JV. It also has board approval for a theme park project in central Phuket and a mixed-use development in Bangkok with Dusit Thani Public Company.
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