IOI Properties' FY22 results above expectations

KUALA LUMPUR: IOI Properties Group Bhd's net profit in the financial year 2022 (FY22) is above expectation, said MIDF Research.

IOI Properties registered a net profit of RM715 million in FY22, accounting for 108 per cent of both MIDF Research and consensus's expectations.

"The slight earnings surprise could be attributed to the lower than expected expenses in the fourth quarter (Q4) ended June 30, 2022," it said. 

Sequentially, IOI Properties's Q4 2022 core net income increased to RM201.5 million mainly due to lower operating expenses and higher contribution from joint ventures. 

However, MIDF Research said core net earnings were lower in FY22 despite higher topline as earnings in FY21 were high base, boosted by contribution from joint ventures in Singapore. 

Meanwhile, the firm said operating profit of the property development division was higher, driven by higher sale of properties in Malaysia and higher contribution from projects in China. 

"Similarly, operating profit of the property investment division improved on the back of contribution from leasing income from IOI Mall, Xiamen and higher rental income from its shopping malls in Malaysia," it said.

MIDF Research revised its FY23 earnings forecast for IOI Properties by 2.8 per cent after factoring in lower expenses. 

"We also introduce our earnings forecast for FY24. Our target price for IOI Properties is unchanged at RM1.29, based on 68 per cent discount to revalued net asset value (RNAV). 

"We maintain our Buy call on IOI Properties as we see a better earnings outlook for the company, driven mainly by investment properties division and turnaround of leisure and hospitality segments," it added.

Source: New Straits Times