TRX City’s net profit drops 55%

PETALING JAYA (June 17): TRX City Sdn Bhd, the property development arm of 1Malaysia Development Bhd (1MDB), achieved a net profit of RM380.64 million in the financial year ended March 31, 2015 (FY15), down 55.7% from the RM858.27 million recorded in the preceding financial year.

According to TRX City’s 2015 annual report, which was filed with the Companies Commission of Malaysia on April 1, the sharp drop in earnings was due to an almost tripling of “other expenses” to RM158.85 million, from RM55 million.

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At the same time, the group also recorded a lower change in fair value of investment properties of RM540 million in FY15, compared with RM896.8 million in FY14, according to the report.

TRX City, formerly known as 1MDB Real Estate Sdn Bhd, is the holding company for KLIFD Sdn Bhd, the master developer of the Tun Razak Exchange in Jalan Tun Razak, and holds a 40% stake in Bandar Malaysia Sdn Bhd.

The group used to own 100% of Bandar Malaysia, before 60% of the project was sold to a joint venture between Iskandar Waterfront Holdings Sdn Bhd and China Railway Engineering Corporation (M) Sdn Bhd late last year for RM5.28 billion.

Besides the Bandar Malaysia deal, which was the second part of a group-wide debt restructuring exercise undertaken by 1MDB after the sale of Edra Global Energy Bhd to China General Nuclear Power Group, TRX City has also received several investors for its flagship Tun Razak Exchange.

This includes Australia’s Land Lease, which acquired 17.2 acres (7ha) of land in Tun Razak Exchange, Lembaga Tabung Haji, Indonesia’s Mulia Group, and WCT Holdings Bhd.

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This article first appeared in The Edge Financial Daily, on June 17, 2016. Subscribe to The Edge Financial Daily here.