IOI Properties’ 4Q profit hit by lower overseas sales

The group’s hospitality and leisure division registered better performance with higher revenue and operating profit on higher occupancy and room rates at IOI resorts such as Le Meridien by Starwood, Putrajaya Marriott Hotel and Palm Garden Hotel, as well as higher golfing activities from Palm Garden Golf Club, Putrajaya. (Graphic by TMR)

By RAHIMI YUNUS / Graphic By TMR

IOI Properties Group Bhd’s net profit for the final quarter ended June 30, 2018 (4Q18), fell 21.3% year-on-year (YoY) due to lower contributions from its overseas property development segment.

The company’s net profit slipped RM71.6 million to RM265 million, while revenue shed 43.6% YoY to RM674 million in 4Q18 due to a weaker performance from its development projects abroad as fewer units remain for sale at Trilinq in Singapore and D3 Residence in Xiamen, China.

Its property investment segment posted an operating profit of RM43.9 million in 4Q18 as higher repair and maintenance costs eat into profitability.

On the flip side, the group recorded a total fair value gain on investment properties of RM164.8 million, which is RM116 million or 238% higher than last year, mainly attributable to IOI City Mall’s renewal of tenancies.

The group’s hospitality and leisure division registered better performance with higher revenue and operating profit on higher occupancy and room rates at IOI resorts such as Le Meridien by Starwood, Putrajaya Marriott Hotel and Palm Garden Hotel, as well as higher golfing activities from Palm Garden Golf Club, Putrajaya.

For the full financial year 2018 (FY18) ended June 30, IOI Properties’ net profit was lower by 14.9% YoY at RM784 million.

The property group remains cautiously optimistic that demand for properties in strategic locations with good transportation infrastructure and close proximity to amenities will continue to draw prospective buyers.

The local property market is set to improve following various initiatives by the government to improve disposable incomes and stabilise prices.

On the international front, the group is expecting higher sales contribution from its residential development in Xiamen in the coming financial year.

In Singapore, IOI Properties noted the government recently introduced new curbs on residential properties, but market-place expectations indicate these could be temporary.

The company declared an interim single-tier dividend of five sen per ordinary share in respect of FY18, payable on Sept 28, 2018