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IOI Prop's 3Q earnings boosted by lower opex, strong JV income

KUALA LUMPUR (May 18): IOI Properties Bhd’s net profit for the third quarter ended March 31, 2018 (3QFY18) jumped 38% year-on-year to RM166.65 million from RM121.14 million, thanks to lower operating expenses, a significant contribution from its joint-venture firms, and lower taxes.

Quarterly revenue, however, slumped 40% y-o-y to RM541.21 million from RM895.82 million, owing to lower contribution from Klang Valley and overseas projects in the property development segment, the group's quarterly results filing today showed.

Other operating expenses fell 80% y-o-y to RM35.87 million, while taxes came in 41% lower at RM51.3 million. Share of results of joint ventures jumped nearly 10 times to RM12.61 million.

Segmentally, IOI Properties said property development saw lower profit contribution from projects in Klang Valley, Malaysia and fewer units remaining for sale in both Trilinq, Singapore and D3 Residence in Xiamen, China.

As for its property investment segment, IOI Properties saw increase in both revenue and operating profit, which were enhanced by higher occupancy and rental rates for the retail and office segments.

In the hospitality and leisure segment, IOI Properties said it saw higher revenue and operating profit, which were mainly derived from higher occupancy and room rates at the Le Meridien by Starwood in Putrajaya, as well as higher golfing activities at Palm Garden Golf Club in Putrajaya.

For the cumulative nine months ended March 31, 2018 (9MFY18), IOI Properties net profit dropped 11% y-o-y to RM518.64 million from RM584.23 million, while revenue declined 29% y-o-y to RM2.12 billion from RM2.99 billion.

Going forward, IOI Properties said it remains optimistic that its properties across strategic locations in Malaysia and overseas will continue to draw prospective buyers.

As for its operations in Malaysia, IOI Properties said it will continue to embark on marketing efforts and initiatives to unlock potential sales.

On the international front, IOI Properties said it will be launching the sale of its residential projects in Xiamen, China during the last quarter of FY18.

In Singapore, IOI Properties said it is expecting to launch the sale of its completed joint-ventures' projects in the near term.

“Together with unbilled sales of RM990 million on hand, the group is expected to perform satisfactorily in the property development segment,” IOI Properties said, adding it should continue to deliver "satisfactory performance" in FY18. — theedgemarkets.com

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