WCT Land Sdn Bhd property development chief operating officer Chong Wah Hing (second left) receiving the trophy from Housing and Local Government Minister Nga Kor Ming as FIABCI Malaysia president Yu Kee Su (left) and SMG group chief executive officer Chan Seng Fatt looks on.

StarProperty account manager Ryan Lee (left) receiving the trophy from Nga on behalf of IGB Bhd.

Shift to profit before tax to ensure equal assessment

This year, for the first time, the Malaysia Developer Awards (MDA) incorporated profit before tax (PBT) as a key metric for assessing the financial health of listed property companies. This decision aligns with the experimental hybrid system adopted by the MDA, aimed at evaluating companies holistically without requiring them to submit additional financial details. By focusing on PBT, the MDA aims to provide a more equitable comparison across the board, particularly for larger conglomerates, where detailed profit breakdowns for individual divisions are not always readily available.

While revenue reflects the total income generated from a company’s transactions, profit offers a more nuanced view of its financial health and operational efficiency. For investors, the profit figure is essential as it reveals the actual monetary gain a company achieves after covering the costs of creating and delivering its products and services. By examining profit, investors can assess a company’s true earning potential, evaluate its profitability and identify potential areas of financial leakage.

Why PBT is the key metric for 2024

This year, the MDA shifted its focus to profit before tax to ensure a more consistent and fair assessment of all companies, particularly those whose property divisions are part of larger conglomerates that may not disclose specific net profit figures. Profit before tax allows for a clearer and more uniform comparison by reflecting the company's profit growth while excluding taxes, which can vary significantly between companies and jurisdictions.

However, the emphasis remains on profit growth, with companies being evaluated on their financial performance over three consecutive years — from 2021 to 2023, with 2020 as the base year. Companies that consistently demonstrated positive profit growth during this period were prioritised in the rankings. Similar to the Revenue Growth attribute, rewards in the form of points are given to companies for consistent performance over a three-year period. Additionally, firms were assessed on their profit as a percentage of revenue, giving preference to those with higher profitability relative to their income.

TOTC Quantitative rankings – Profit Growth

In the Top-of-the-Charts (TOTC) rankings, profit growth was a pivotal factor. For companies in the RM1bil and above category, IGB Bhd secured the top spot in the profit growth attribute, achieving three consecutive years of positive growth. Although Sime Darby Property Bhd achieved the highest score for profit as a percentage of revenue, IGB’s overall profit growth performance pushed it to the top.

Similarly, in the RM1bil and below category, WCT Holdings Bhd excelled in both profit growth and profitability as a percentage of revenue, earning it the highest score and securing its position as the leader in this attribute.

By focusing on profit before tax, the MDA 2024 underscores the importance of profitability and growth as key indicators of a company’s financial health, giving investors a clearer view of the companies best positioned to generate sustainable value in the future.

Ranking by profit growth

Ranking by profit growth

Stay ahead of the crowd and enjoy fresh insights on real estate, property development, and lifestyle trends when you subscribe to our newsletter and follow us on social media.