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The Malaysian market often buzzes with the latest corporate earnings, and the recent first-quarter report from KLCC Property Holdings Berhad (KLCCP) Stapled Group for the period ended 31 March 2025 offers a fascinating glimpse into a diversified property giant. While the headline figures of revenue and profit before tax show a slight dip, a deeper dive reveals resilience in key segments and promising growth in areas directly impacting shareholders. This report highlights the Group’s strategic moves, including the acquisition of the remaining stake in Suria KLCC, and its commitment to enhancing its diverse portfolio, all while delivering an increased dividend to stapled security holders.
First Quarter Performance Highlights
The KLCCP Stapled Group reported a revenue of RM406.9 million for the first quarter of 2025, a marginal decrease from RM408.9 million in the same period last year. Profit before taxation also saw a decline, settling at RM233.5 million compared to RM252.1 million in the first quarter of 2024. This was largely influenced by increased financing costs associated with the acquisition of the remaining 40% stake in Suria KLCC.
However, the narrative shifts positively when looking at the profit attributable to equity holders of the Company, which surged by 18.17% to RM89.0 million from RM75.3 million previously. This strong performance translated into an improved Earnings Per Stapled Security (EPSS), climbing to 11.16 sen from 10.42 sen in the prior year, marking a 7.10% increase. Furthermore, the Group declared an interim dividend of 9.20 sen per stapled security, a pleasant increase from 9.00 sen distributed in the corresponding quarter last year, reflecting a 2.22% rise.
Q1 2025 Key Financials
- Revenue: RM406,917k
- Profit Before Tax: RM233,524k
- Profit Attributable to Equity Holders: RM89,003k
- Earnings Per Stapled Security: 11.16 sen
- Dividend Per Stapled Security: 9.20 sen
Q1 2024 Key Financials
- Revenue: RM408,901k
- Profit Before Tax: RM252,118k
- Profit Attributable to Equity Holders: RM75,319k
- Earnings Per Stapled Security: 10.42 sen
- Dividend Per Stapled Security: 9.00 sen
Segmental Performance: A Closer Look
Understanding the Group’s performance requires dissecting its core business segments:
Property Investment – Office
The office segment continues to be a pillar of stability, with revenue remaining largely unchanged at RM146.2 million and profit before tax at RM120.9 million. This consistency is largely attributed to the Triple Net Lease (TNL) arrangements and long-term leases, which provide a steady and recurring income stream, safeguarding against market volatility.
Property Investment – Retail
The retail segment, anchored by Suria KLCC, showcased robust growth. Revenue increased by 1.87% to RM143.2 million, and profit before tax jumped by 5.26% to RM114.7 million. This positive momentum reflects the Group’s success in curating an appealing tenant mix, upward revisions of base rents, and improved occupancy rates, particularly for the retail podium of Menara 3. Additionally, the refinancing of Sukuk Murabahah at the end of 2024 contributed to lower financing costs, further bolstering this segment’s profitability.
Hotel Operations
The hotel segment, primarily Mandarin Oriental Kuala Lumpur (MOKL), faced headwinds during the quarter. Revenue declined by 19.53% to RM46.9 million, resulting in a loss before tax of RM4.8 million, a significant shift from the profit reported in the same period last year. This downturn was primarily due to extensive ballroom upgrading works and scheduled maintenance during what is typically a low season, all aimed at enhancing the overall guest experience for future periods.
Management Services
The management services segment recorded a healthy increase in revenue by 9.30% to RM90.2 million, with profit before tax remaining stable at RM20.0 million. This growth was driven by higher maintenance service activities delivered by KLCC Urusharta and increased carpark income.
Here’s a summary of the segment performance:
| Segment | Q1 2025 Revenue (RM’000) | Q1 2024 Revenue (RM’000) | Revenue Change (%) | Q1 2025 PBT (RM’000) | Q1 2024 PBT (RM’000) | PBT Change (%) |
|---|---|---|---|---|---|---|
| Property Investment – Office | 146,229 | 146,154 | 0.05% | 120,933 | 120,781 | 0.13% |
| Property Investment – Retail | 143,150 | 140,526 | 1.87% | 114,672 | 108,941 | 5.26% |
| Hotel Operations | 46,929 | 58,316 | (19.53%) | (4,776) | 1,762 | (>100.0%) |
| Management Services | 90,177 | 82,506 | 9.30% | 19,975 | 19,925 | 0.25% |
Financial Health and Cash Flow
On the balance sheet, total assets saw a slight decrease to RM18.53 billion from RM18.66 billion at the end of December 2024. Similarly, total equity reduced marginally to RM13.60 billion from RM13.70 billion. Net asset value per stapled security also saw a minor dip to RM7.51 from RM7.57. Cash and bank balances also decreased. From a cash flow perspective, net cash generated from operating activities was RM219.1 million, lower than the RM244.2 million in the same period last year. Net cash used in financing activities increased to RM315.3 million, primarily due to higher dividend payments. The Group’s financings increased slightly in the short term due to a term loan reclassification, but long-term financings remained stable.
Risks and Prospects: Navigating the Macro Landscape
The Group acknowledges the prevailing global uncertainties, including geopolitical tensions and new US tariffs, which continue to shape the broader macro-economic landscape. Domestically, consumer sentiment is expected to be more discerning due to subsidy rationalization and moderate inflationary pressures, potentially leading to more selective spending in discretionary segments like retail and hospitality.
Despite these challenges, KLCCP Stapled Group remains proactive. Suria KLCC is focused on strengthening its appeal through thoughtful tenant curation and ongoing enhancements to ambience and sustainability, aiming to remain a preferred destination. Mandarin Oriental Kuala Lumpur is also on track with its asset enhancement plans, with the recent completion of the Club Lounge and Grand Ballroom upgrades, aligning with growing customer demand for personalized, high-quality experiences.
The office segment, with its long-term leases, is expected to continue providing a stable and recurring income stream, acting as a crucial buffer against market fluctuations. The Directors are confident that the Group’s balanced portfolio and disciplined approach will enable it to manage near-term challenges while sustaining steady performance.
Summary and
The first quarter of 2025 presented a mixed but ultimately resilient picture for KLCCP Stapled Group. While overall revenue and profit before tax saw a slight contraction, largely due to increased financing costs from a strategic acquisition and temporary disruptions in the hotel segment, the Group demonstrated strong underlying performance in key areas.
The significant increase in profit attributable to equity holders and Earnings Per Stapled Security, coupled with a higher dividend payout, underscores the Group’s ability to generate value for its shareholders. The retail and management services segments showed healthy growth, while the office portfolio provided stable income. The temporary setback in hotel operations is part of a larger asset enhancement strategy, which is expected to yield positive returns in the long run.
Looking ahead, the Group is well-positioned to navigate the evolving economic landscape. Its diversified portfolio, strategic asset enhancements, and focus on long-term leases provide a strong foundation for sustained performance.
Key points to consider:
- The impact of higher financing costs due to the acquisition of the remaining Suria KLCC stake.
- The temporary dip in the hotel segment’s performance due to ongoing upgrading works.
- The resilience and growth potential of the retail segment through strategic tenant curation and enhancements.
- The stability provided by the office segment’s long-term leases.
- The Group’s proactive approach to asset enhancement and managing market uncertainties.
From a professional standpoint, this report showcases a management team that is strategically investing for future growth, even if it means some short-term impacts on top-line figures. The increase in distributable income and EPSS indicates that these investments are ultimately benefiting the core shareholders. The ongoing asset enhancement initiatives, particularly in the hotel and retail segments, are crucial for maintaining competitiveness and attractiveness in a discerning consumer market.
Do you think KLCCP Stapled Group can maintain this positive momentum in profit attributable to equity holders and dividend growth in the coming quarters, especially as the hotel upgrades complete and the retail segment continues to thrive? Share your thoughts in the comments below!
