KUALA LUMPUR (Feb 14): Property investment group Goldis Bhd — which is in the midst of a takeover of IGB Corp Bhd — revealed that its fourth-quarter (4Q) net profit tripled year-on-year (y-o-y), thanks to better performance of its retail property investments and a disposal gain.

In a filing with the stock exchange yesterday, Goldis said net profit for 4Q ended Dec 31, 2017 (4QFY17) jumped to RM59.88 million from RM16.29 million in the corresponding quarter last year.

The group said its property investment in the retail sector — namely IGB REIT, the owner of Mid Valley Megamall and The Gardens Mall — did better, while it netted a one-off gain of RM27.3 million from the sale of land by a subsidiary, which was recognised in its property development segment during the quarter.

Quarterly revenue, meanwhile, was up 16% y-o-y to RM362.67 million from RM312.19 million, mainly due to the recognition of revenue of RM61.9 million from the land sale, which mitigated a lower contribution from Goldis’ hotel segment.

This brought Goldis’ FY17 net profit to RM215.14 million, up 30% from RM165.03 million in the last financial year.

Full-year revenue, however, slid 4.3% to RM1.2 billion from RM1.26 billion in FY16, due to lower contributions from its hotel and investment segments.

Its hotel segment saw a 19.6% decline in revenue following the disposal of three hotels (Cititel Express Kuala Lumpur in March 2016, MiCasa Hotel Apartment, Yangon, in July 2016, and Renaissance Kuala Lumpur Hotel in January 2017). Its investment segment, where it derives revenue mainly from Mid Valley City Energy Sdn Bhd which distributes electricity to Mid Valley City and IGB International School, registered a 34% decline in top line due to lower utility consumption by tenants of Mid Valley.

Going forward, Goldis said the group expects full consolidation of its businesses to create a more cohesive, effective and efficient operating structure, with the completion of the IGB Corp takeover.

It expects stable performance within its hotel segment despite stiff competition in the industry, but foresees challenges for its property investment and property development segments given the increased supply, weak sentiment and the recent hike in interest rates.

Goldis, which holds a 73.4% stake in IGB Corp and has targeted to complete its takeover by March this year, will become one listed entity following that and be renamed Ipoh Goldis Bersatu Bhd.

At 5pm yesterday, the counter closed unchanged at RM3.10, which valued it at RM1.9 billion.

This article first appeared in The Edge Financial Daily, on Feb 14, 2018.

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