IOI Properties 1Q profit rises 64% to RM189.57m

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Source: The Edge Markets

KUALA LUMPUR (Nov 22): IOI Properties Group Bhd saw its net profit grow by 64.2% to RM189.57 million or 4.3 sen per share in the first financial quarter ended Sept 30, 2016 (1QFY17) from RM115.48 million or 3.07 sen per share a year ago.

The stronger earnings performance was mainly attributed to better revenue and operating profits from IOI Properties’ property development and property investment segments, as well as higher revenue recorded by its leisure and hospitality segment.

In a filing with Bursa Malaysia this evening, IOI Properties said its revenue rose 51.1% year-on-year (y-o-y) to RM899.52 million in 1QFY17 from RM595.26 million.

IOI Properties’ property development segment saw its revenue increase 58% y-o-y to RM793.6 million, while its operating profit grew 26% y-o-y to RM223.5 million in 1QFY17.

The higher revenue and operating profit were mainly contributed from higher sales take-up rates for overseas projects in Singapore and Xiamen, China.

“In addition, sales from the new townships, IOI Resort City and Warisan Puteri @ Sepang, continued to register favourable take-up rates, coupled with steady increase in progress works from all on-going development projects,” it said.

Meanwhile, IOI Properties’ property investment segment saw its revenue increase by 17% to RM71.3 million, while its operating profit increased by 43% to RM42.5 million, thanks to IOI City Mall, which recorded higher average occupancy rates as well as upward rate revision upon tenancy renewal.

As for the group’s leisure and hospitality segment, its revenue grew 7% to RM32.5 million, mainly derived from Four Points by Sheraton, Puchong and Le Meridien by Starwood, Putrajaya which commenced its business operations in August this year.

On future prospects, IOI Properties said the residential property market is expected to remain soft due to weak consumer sentiment and tight lending conditions. However, the demand for properties in the medium price range category remains resilient.

“With the sizable land bank in strategic locations, the group is well-positioned to face the challenges ahead. It will continue to focus on improving its group synergies to become more resilient and competitive,” it said.

IOI Properties shares ended the day five sen or 2% lower at RM2.39, with 2.42 million shares changing hands.