Tropicana Corp 2Q net profit down 18% on lower revenue

KUALA LUMPUR (Aug 23): Lower sales have dragged Tropicana Corp Bhd’s net profit for the second quarter ended June 30, 2018 (2QFY18) lower by 18.24% to RM38 million from RM46.48 million a year ago.

In a filing with the local stock exchange today, Tropicana attributed the lower earnings to the fixed general and administrative expenses, which it had to incur despite lower revenue, adding that the group also saw additional staff costs since 2QFY18 in preparation for the commencement of operations at the W Hotel in Kuala Lumpur City Centre.

Quarterly revenue was 35.9% lower at RM281.43 million, from RM439.06 million in 2QFY17.

For the cumulative six months ended June 30, 2018, Tropicana’s net profit rose 14.78% to RM84.4 million or 5.77 sen a share, compared with RM73.53 million or 5.09 sen a share. Revenue, however, declined 9.64% to RM734.43 million from RM812.74 million.

On its outlook, Tropicana said that whilst the overall short-term prospects for the industry are expected to remain challenging, the group believes that there will still be demand for properties in prime locations with attractive pricing.

“The group will continue to focus on being market-driven and unlock the value of its landbank, at strategic locations across the Klang Valley, Northern and Southern Regions,” said Tropicana, adding that it will continue to focus on the introduction of new phases across its signature developments, namely at Tropicana Heights, Tropicana Aman, Tropicana Metropark and Tropicana Danga Cove, which are expected to continue to contribute positively to the Group’s earnings.

Also, Tropicana is confident of registering steady recurring income stream from its property investment portfolio that will include positive contribution from the 150-room W Hotel in the Kuala Lumpur City Centre which commenced business on Aug 23, 2018.

Shares of Tropicana closed up one sen or 1.15% at 88 sen for a market capitalisation of RM1.28 billion. — theedgemarkets.com

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