Financial Information

Unaudited Financial Statements and Distribution Announcement For the Third Quarter Ended 30 September 2020

Financials Archive

Get Adobe Reader Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.

Profit & Loss

Balance Sheet

Review of Performance

As China's economic recovery from COVID-19 picked up pace in 3Q 2020, total outlet sales for 3Q 2020 has improved by RMB 274.8 million or 32.9% from 2Q 2020.

Total outlet sales for 3Q 2020 was below that of 3Q 2019 by RMB 107.8 million or 8.8%. Impact on 3Q 2020 EMA rental income (excluding straight-line adjustments) was cushioned by the fixed component of EMA rental income, as structured in the Entrusted Management Agreement (EMA), resulting in a softer drop of RMB 3.2 million or 2.1% in EMA rental income (excluding straight-line adjustments) as compared to 3Q 2019. In SGD terms, EMA rental income (excluding straight-line adjustments) for 3Q 2020 was marginally lower by S$0.3 million or 1.0%, due to the appreciation of Renminbi against Singapore Dollar by 1.1% in 3Q 2020 as compared to 3Q 2019.

The income available for distribution to Unitholders for 3Q 2020 was S$21.2 million, 8.5% higher compared to S$19.6 million for 3Q 2019. The increase was mainly attributable to lower tax expense and interest expense, partially offset by higher trust expenses.

Higher trust expenses for 3Q 2020 by S$0.3 million was largely due to additional professional fees incurred for the S$125 million offshore loan refinancing.

Finance costs for 3Q 2020 was higher by S$0.3 million or 4.5% as compared to 3Q 2019. This was mainly due to non-cash write-off of unamortised upfront fee of S$0.9 million on the above-mentioned offshore loan which was refinanced in September 2020 with no impact on the distributable income to Unitholders, partially offset by lower interest expense on borrowings contributed by lower interest rate on the offshore loan.

Tax expense for 3Q 2020 was lower by S$1.2 million or 23.4% mainly attributable to lower effective tax rate as compared to 3Q 2019.


The world's second-largest economy Gross Domestic Product ("GDP") grew 4.9% in the third quarter of 2020 ("3Q 2020") on a Year-on-Year ("YoY") basis (compared to -6.8% and +3.2% for the first and second quarter respectively), bringing growth for the first three quarters of the year to 0.7% from a year ago. In September, the total retail sales of consumer goods reached 3,529.5 billion yuan, up by 3.31 percent YoY, 2.8 percentage points higher than August, maintaining the growth for two consecutive months. The International Monetary Fund said on 14 October 2020 that China would be the only major economy to report positive growth in 2020.

China is also likely to be the only country to reach pre-crisis level by the end of 2020. Its economy has reached 80% of the level before the pandemic. The country's management of COVID-19 outbreak is driving a rebound in consumption and production activities2. China's growing middle class would play a pivotal role in fueling the country's economic recovery. Stronger domestic demand and increased localisation in some affected industries will mitigate the impact from the problems of the external economy. This strategy, officially called "dual circulation", will be the basis for China's formulation of its 14th five-year plan.

In order to further promote domestic demand, China needs to increase household income to leverage on its already large consumer market with a population of 1.4 billion, coupled with a rapidly expanding middle class estimated at more than 400 million3 people. The recently concluded 'Golden Week' holidays witnessed the huge potential of the Chinese consumption market. China recorded 637 million domestic tourists, generating total revenue of 467 billion yuan, according to data from the Ministry of Culture and Tourism. Robust recovery of the domestic tourism sector has stimulated domestic consumption. Major retailers and catering companies across the country posted combined sales revenues of 1.6 trillion yuan during the holiday season, with daily revenue up 4.9 percent year-on-year4.

This is positive development for Sasseur REIT's outlets as our main customers are resident Chinese middle-class that form the bulk of the important consumers in China.

Chongqing Market Update

There were no new retail projects or outlets in Chongqing in 3Q 2020, leaving the total retail supply at around 5.9 million sqm. We expect to see two new malls enter the market in the next quarter. They are Starlight 68 Phase B with 78,000 sqm in Guanyinqiao and Jinsha Paradise Walk with 210,000 sqm in Shapingba. With the gradual reduction of the domestic epidemic and the gradual recovery of demand, the Chongqing retail market is expected to recover and do well.

Hefei and Kunming Market Update

For 3Q 2020, no new outlet malls were opened in Hefei and Kunming. Our outlets in these two cities continued to see improved sales through many promotional activities and attractive discounts.

The recent National People's Congress held in May 2020 announced the monetary and fiscal easing measures to support growth. The fiscal stimulus package is equivalent to around 5% of GDP, coupled with rates cut and assistance for small businesses. These measures aim to stimulate domestic growth. Sasseur REIT's outlets are well-positioned to benefit from these positive measures and hopefully, see a full recovery of its business by the end of 2020.

1 National Bureau of Statistics of China

2 Nikkei Asia 6th Oct 2020

3 Reuters

4 Ministry of Commerce of China