MRCB-Quill REIT’s Q4 net profit down 80% on deficit in revaluation
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MRCB-Quill REIT’s (MQREIT) net profit for the fourth quarter ended Dec 31, 2017 plunged 80% on a RM18.2 million deficit in revaluation of its investment properties.
It made a net profit of RM3.3 million for the quarter under review, compared with Rm16.9 million for the same quarter in 2016.
This was on 18.3% higher revenue of RM46.1 million, compared with RM38.9 million for the same quarter in 2016.
The REIT comprises of 10 buildings worth a market value of RM2.2 billion as at Dec 31, 2017.
In 2017, 14% of MQREIT’s total net lettable area was due for renewal.
As at Dec 31, 2017, MQREIT successfully renewed approximately 80% of these leases. It is now in active negotiations for the renewal of leases due in 1Q 2018.
In its filing with Bursa Malaysia, MQREIT said the Klang Valley office market is expected to remain challenging and for 2018, they will focus on asset management and leasing strategies that are centred on tenant retention.
For the 12 month period ended Dec 31, 2017, MQREIT registered a 11.4% jump in net profit to RM9.9 million, compared with RM62.8 million for the same period in 2016.
Revenue for the period was 32.8% higher at RM181.5 million, compared with RM136.7 million in 2016.
Its share price gained one sen to RM1.22 today, with 131,200 shares changing hands.
Questions & Answers
Q.What caused the significant drop in net profit for MRCB-Quill REIT in Q4 2017?
What caused the significant drop in net profit for MRCB-Quill REIT in Q4 2017?
The substantial 80% decrease in net profit for the fourth quarter was primarily due to an RM18.2 million deficit from the revaluation of its investment properties. This brought the net profit down to RM3.3 million for the quarter.
Q.How did the REIT perform financially over the full year 2017 compared to Q4?
How did the REIT perform financially over the full year 2017 compared to Q4?
For the full 12-month period in 2017, MQREIT saw an 11.4% increase in net profit, reaching RM9.9 million. This contrasts with the 80% drop in net profit recorded for the single fourth quarter of 2017.
Q.What is the company's strategy for the challenging market conditions expected in 2018?
What is the company's strategy for the challenging market conditions expected in 2018?
For 2018, MQREIT plans to focus on asset management and leasing strategies, with a particular emphasis on tenant retention. This approach is in response to the expected challenging Klang Valley office market.
Q.What was the total value of MQREIT's properties at the end of 2017?
What was the total value of MQREIT's properties at the end of 2017?
As of December 31, 2017, the REIT comprised 10 buildings, which had a total market value of RM2.2 billion. This figure represents the collective worth of its investment properties.
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