IOI Properties 3Q earnings rise on improved margins

By FARA AISYAH / Pic By TMR File

IOI Properties Group Bhd’s strong sales of its project abroad and in the Klang Valley saw its post a 22% year-on-year (YoY) rise in earnings to RM136.64 million for the first quarter ended Sept 30, 2019 (1Q19).

In an exchange filing yesterday, the developer said higher operating profit in the period was contributed by development projects in China and the Klang Valley, higher share of profit in joint ventures mainly arising from the sale of South Beach Residences in Singapore and over provision of expenses in the previous financial year.

Earnings per share for the three months was 2.48 sen. Quarterly revenue fell 2.26% YoY to RM540.32 million due to lower contribution from its property development segment.

IOI’s property development segment recorded a RM398.9 million revenue in the quarter, which is RM16.7 million or 4% YoY lower, due to lower sales at its Singapore and Johor operations arising from lesser units remaining for sale.

At its Johor operations, IOI stated that most of the remaining unsold units are pending for “Bumi” release from the governing authority.

The property development segment’s operating profit of RM181.6 million for the quarter is RM18.7 million or 11% higher YoY due to higher profit contribution from development projects in China and Klang Valley, and over provision of expenses in the previous financial year.

The group’s property investment segment recorded a revenue and operating profit of RM90.3 million and RM55 million respectively for 1Q19.

The company saw a higher profit contribution from its retail subsegment arising from higher occupancy rate and average rental rate post re-fit exercise carried out at the IOI Mall in Puchong, Selangor.

IOI’s hospitality and leisure segments revenue was up 2% YoY to RM50.1 million, while the operating profit decreased by 5% YoY to RM6.2 million.

“In Malaysia, the group will continue to tap on the Home Ownership Campaign coupled with ongoing marketing campaigns targeting both the traditional and digital platforms audience to create visibility for our developments.

“Echoing the success from the recent launch of affordable high-rise residential development in Warisan Puteri in Sepang, Selangor, the group will continue to focus on the affordable housing segment for our Malaysian operations,” IOI said.

It added that uncertainties in the global business environment stemming from the ongoing US-China trade conflicts, as well as cooling measures imposed by the Chinese government have to a certain extent decelerated the momentum of the property market in China.

The group remains optimistic on the prospects of its projects in China due to their locations which are close to amenities and infrastructure.

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