Guocoland returns to black in 2QFY22 on higher contributions from property development, lower hospitality division losses

KUALA LUMPUR (Jan 25): Guocoland (Malaysia) Bhd reported a net profit of RM3.76 million for the second quarter ended Dec 31, 2021 (2QFY22) versus a net loss of RM11.37 million a year earlier on higher contributions from the property development division and lower loss incurred by the hospitality division.

The property development arm of the Hong Leong Group posted earnings per share of 0.56 sen compared with earnings per loss of 1.7 sen previously.

The developer's revenue also rose 15.59% to RM105.56 million from RM91.32 million, according to its bourse filing.

Guocoland attributed the better performance in its property development division mainly to the increase in the percentage of completion from one of its ongoing projects in Emerald 9 @ Cheras.

“The performance of the hospitality division also improved with higher occupancy and average room rates due to the relaxation of Movement Control Orders (MCO) imposed by the Malaysian government which allowed for interstate traveling,” it said.

Guocoland said it incurred higher selling and marketing expenses with increased promotional activities after the relaxation of the MCO. Besides, the administration expenses also increased due to higher staff expenses, the group noted.

On a quarter-on-quarter basis, Guocoland was in the black in 2QFY22 versus a net loss of RM7.98 million in 1QFY22 as revenue jumped 200% from RM35.13 million in the immediate preceding quarter.

For the six months ended Dec 31, 2021, the group’s net loss increased to RM4.22 million from RM2.82 million. Six-month revenue fell 22.81% to RM140.68 million from RM182.25 million a year ago.

On prospects, the group said it will continue to focus on monetising its inventories and progressing its development projects for timely completion.

“New product launches will be phased according to prevailing market conditions. The group remains alert to opportunities to increase its landbank,” it added.

Guocoland shares settled at 72.5 sen, up half a sen or 0.69%. The group has a market capitalisation of RM507.83 million.

Edited by Lam Jian Wyn

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