KUALA LUMPUR (July 24): UOA Real Estate Investment Trust's (UOA REIT) second-quarter net profit fell 7.24%, on higher borrowing costs and property operating expenses, the latter driven by increased electricity costs and repair and maintenance expenses.

It posted a net profit of RM13.98 million or 2.16 sen for the second quarter ended June 30, 2023 (2QFY2023), versus RM15.07 million or 2.37 sen a year ago.

The rise in operating expenses offset marginal gains in quarterly revenue, which rose 0.39% to RM28.67 million from RM28.56 million for the same period last year.

Meanwhile, net rental income slipped 2.64% to RM21.15 million, from RM21.72 million for 2QFY2022.

The REIT announced an interim income distribution of 3.96 sen per share for FY2023. The income distribution, with an ex-date of Aug 7, will be paid on Aug 30.

During the same period last year, the trust made an interim income distribution of 4.30 sen.

Quarter-on-quarter, net profit fell 4.31% from RM14.61 million for 1QFY2023, as revenue dipped 0.36% from RM28.77 million for the immediate preceding quarter, due to higher sales of machines.

For the cumulative six-month period ended June 30, 2023, net profit slid 8.04% to RM28.59 million, from RM31.09 million for the same period last year. Revenue fell 0.58% to RM57.44 million, from RM57.77 million previously.

On prospects, UOA REIT said occupancy and rental rates will continue to be influenced by overall economic growth and property sector market sentiment.

“The manager (UOA Asset Management Sdn Bhd) will continue to actively manage properties in the portfolio with prudent capital management in order to maximise yields for unitholders. Meanwhile, efforts to seek opportunities for future acquisitions that meet the objectives of UOA REIT will continue," it said.

UOA REIT closed unchanged at RM1.18 on Monday (July 24), giving it a market capitalisation of RM763.43 million.