IOI Prop 2Q earnings more than doubles on higher contribution from Chinese development projects

Source: The Edge

KUALA LUMPUR (Feb 26): IOI Properties Group Bhd’s second-quarter net profit more than doubled to RM214.86 million, from RM97.45 million a year earlier, on lower cost of sales and as a result of the group’s joint ventures turning to profit.  

Earnings per share for the quarter ended Dec 31, 2018 (2QFY19) rose to 3.9 sen, from 1.77 sen previously, the group said in a filing today. 

IOI Properties said the increase in profit was largely derived from higher contribution from its property development projects in China, and higher share of profit in joint ventures arising from the sale of South Beach Residences in Singapore. 

The higher profit was despite quarterly revenue declining 4.21% to RM666.15 million, from RM695.41 million a year earlier. 

The group attributed its lower revenue to lower progress billing in the property development segment, which offset higher numbers from its property investment and hotel operations. 

For the cumulative six-month period (1HFY19), IOI Properties’ net profit fell 4.59% to RM326.82 million, from RM342.56 million a year ago, on higher taxes, which ate into the turnaround of its joint ventures in the period under review.

The group said the higher profit is contributed by its development projects in China and higher share of profit in joint ventures arising from the sale of South Beach Residences in Singapore.  

Half-year revenue dipped 22.3% to RM1.23 billion, from RM1.58 billion in 1HFY18. “This is mainly due to lower sales from Singapore, arising from lesser units remaining for sale in The Trilinq,” the group said.

Moving forward, IOI Properties said its projects in China are “anticipated to continue its positive impact” with the 4 billion yuan gross development value IOI Palm City project in Xiamen, slated for launch within the next two years.

“In Singapore, our recently-launched joint venture project South Beach Residences is anticipated to generate positive impact on the group's financial results arising from positive sales response,” it said.  

In its property investment segment, the Central Boulevard in Singapore is progressing in accordance to plan with the construction of main building expected to commence by the fourth quarter of the current financial year, it added. 

Shares of IOI Properties rose two sen or 1.24% to RM1.63, giving the group a market capitalisation of RM8.98 billion.