IOI Properties to further consolidate amid Covid

The property developer says the recovery of property investment and hospitality segments had been impacted by the reinstatement

by HARIZAH KAMEL / pic by MUHD AMIN NAHARUL

IOI Properties Group Bhd will continue to consolidate its market position despite a challenging outlook to ensure satisfactory performance in the coming quarters.

In an exchange filing yesterday, the property developer stated that it will leverage its digital marketing capabilities and IOI eMarketplace platform to drive sales and facilitate property transaction processes.

It added that the Home Ownership Campaign (HOC) under the short-term National Economy Recovery Plan (Penjana) will continue to drive sales of its mid-price range products in tandem with market demand, as they remain well sought-after in its existing townships.

IOI Properties’ net profit for the first quarter ended Sept 30, 2020 (1QFY21), increased 16.8% year-on-year (YoY) to RM192.11 million from RM164.39 million a year ago, mainly attributable to better performance from the property development segment. Revenue for the quarter also rose 22% YoY to RM659.7 million from RM540.32 million.

The group said its property development segment recorded revenue and operating profit of RM549.7 million and RM249.1 million respectively, in the current year quarter mainly attributed to higher sales contribution from both Malaysia and China operations.

On property investment, the group reported lower revenue and operating profit of RM83.2 million and RM47.1 million respectively for the quarter, due to rental relief assistance extended to tenants during the Covid-19 pandemic.

IOI Properties said the recovery of property investment and hospitality segments had been impacted by the reinstatement of the Conditional Movement Control Order (CMCO) by the government in light of the resurgence in Covid-19 cases.

“The retail and office segments will continue to adopt active and pragmatic tenant retention strategies to maintain occupancy rates and to support our tenants as business partners.

“The hospitality and leisure segments will maintain its aggressive marketing and promotion packages, while implementing cost optimisation strategies by progressively right-sizing the workforce in preparation for medium-and long-term recoveries,” it said.

Internationally, the group said its operations in China continue to contribute strongly to the financial performance in the 1Q21 due to pent-up demand following the Chinese economy recovery from the pandemic.

The group anticipated demand for residential properties to normalise and moderate in the coming quarters, adding the construction progress of IOI Palm City Mall remains on schedule and business is expected to commence by mid-2021.

In Singapore, the construction progress of Central Boulevard development has resumed since August, and the management is endeavouring to catch up on lost time resulting from the country’s Circuit Breaker that was imposed in April.