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IOI Properties 1Q profit up 28% on better earnings from core businesses

KUALA LUMPUR (Nov 20): IOI Properties Group Bhd’s net profit jumped 28.11% to RM242.85 million in its first quarter ended Sept 30, 2017 (1QFY18), from RM189.57 million a year earlier, thanks to better operating profit across all three core businesses.

Earnings per share (EPS) rose to 4.41 sen, from 4.02 sen in 1QFY17, the group said in a filing with Bursa Malaysia. 

Quarterly revenue however declined 3.28% to RM869.98 million, from RM899.52 million previously, mainly due to lower contribution from the group’s property development overseas.

The property development segment saw 6% lower revenue on-year at RM742.2 million. “The higher revenue in the preceding year's corresponding quarter is mainly due to higher take-up rates from overseas projects in both Singapore and Xiamen, China,” the filing said.

The property group said operating profit of its property development segment rose 20.9% to RM270.2 million, from RM223.5 million previously, mainly due to higher sales from development projects in both the Klang Valley and Johor.

Meanwhile, operating profit for its property investment arm rose 16% on-year to RM49.4 million, driven by higher retail occupancy and rental rates, while its leisure and hospitality arm saw net profit risen 161% to RM7.5 million, contributed by operations in its ‘Le Meridien by Starwood’ in Putrajaya.

On prospects for the property development market, IOI Properties said it expects the market to “scale up to firmer ground, barring any surprises on the international and domestic front”.

“Overall, the property development segment in both Malaysia and overseas is expected to perform satisfactorily,” the group added.

Meanwhile, the group will continue to manage its portfolio of investment properties to ensure they are well-occupied. “The group's investment properties which are situated in strategically-located urban areas are expected to continue to enjoy healthy occupancies and good rental yields,” the filing added.

“With the group’s sizeable land bank in strategic locations, both in Malaysia and overseas, coupled with a strong track record in delivery, the group is well-positioned to adapt to market conditions,” the group said. 

“Barring any unforeseen circumstances, the group is expected to continue to deliver satisfactory performance in the financial year 2018,” the filing added.

Shares of IOI Properties rose 1 sen or 0.51% to RM1.99 today, with 1.03 million shares traded, giving it a market capitalisation of RM10.96 billion. — theedgemarkets.com

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