PETALING JAYA: IOI Properties Group Bhd (IOI Prop) saw a strong set of topline performance in its second quarter ended Dec 31, 2016, mainly boosted by its property development segment.
The company’s second quarter revenue jumped 34% to RM1.19bil from RM894.4mil in the same quarter of the preceding year.
Operating profit, meanwhile, rose by 23% to RM393.6mil in the current quarter from the previous year while net profit declined by 11% to RM273.5mil.
The company said the drop in net profit was mainly due to the decrease in share of results from its joint ventures derived from a net fair value gain of RM121mil.
“After excluding the net fair value gain, the profit before taxation for the current quarter is RM82.8mil or 26% higher than preceding year’s corresponding quarter,” it said in a filing with Bursa Malaysia.
The company saw strong performances in its property development, property investment as well as leisure and hospitality businesses.
“The demand for properties within well-planned and sustainable developments will continue to be supported by a young population demographic, conducive interest rate environment and urbanisation,” its chief executive officer Lee Yeow Seng said in a statement.
“Our property development segment is set to contribute positively, evidenced by the demand for mid-priced range properties located at IOI Resort City, Bandar Puteri Bangi and Warisan Puteri @ Sepang with accessibility to good amenities,” Lee added.
IOI Prop’s revenue from the property development segment rose 36% to RM1.07bil. The segment achieved operating profit of RM337.5mil, an increase of 23% as compared to the same quarter a year ago.
The company said the increase is due to the higher take-up rates for its projects in Singapore and favourable take-up rates for projects in IOI Resort City Putrajaya, 16 Sierra and Bandar Puteri Bangi.
As for its property investment segment, IOI Prop saw an increase in revenue of 12% from RM69mil to RM77.5mil and a 17% rise in operating profit from RM37.7mil to RM43.9mil.
“This was achieved with the increase of average occupancy rates and upward rate revision from tenancy renewal of IOI City Mall, which has contributed vastly to the group’s property investment segment,” the company said.
“The strategic locations of our retail and office developments within matured townships and high growth corridors have enabled our investment portfolio to enjoy healthy occupancy rates and rental yields,” it added.
IOI Prop’s leisure and hospitality segment saw a 24% rise in revenue to RM47.5mil and a 44% jump in operating profit to RM11.1mil.
The rise in revenue was mainly due to its hotels – Four Points by Sheraton, Puchong and Le Meridien Putrajaya, with the latter commencing its operations in August 2016.
Lee said that on the international front, development projects in Singapore and Xiamen are progressing well and expected to continue contributing positively to its results.
“With our sizable land bank in strategic locations, a good delivery track record and our ability to adapt to market demand, we expect to perform well in the remaining financial period,” he said.
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