I-Bhd 2Q net profit up 5.6% on higher profit margin

KUALA LUMPUR (July 24): Property developer I-Bhd's net profit rose 5.6% to RM22.31 million in the second quarter ended June 30, 2018 (2QFY18), from RM21.12 million a year ago, thanks to a hike in profit margin for the current quarter under review, arising from the cost adjustment as a result of changes in the national tax regime.

This resulted in a higher earnings per share of 2.1 sen for 2QFY18, from 1.99 sen 2QFY17.

This was despite the group posting lower revenue for the current quarter under review, down 18.8% to RM107.16 million, from RM131.94 million in 2QFY17.

For the cumulative six months (1HFY18), I-Bhd's net profit rose 11.1% to RM 46.8 million, from RM42.12 million a year ago, while revenue grew 10.9% to RM266.51 million, from RM240.39 million in 1HFY17.

In terms of segment performance, property development remained the largest revenue contributor for 1HFY18, with RM244 million being recorded or 91.6% of the group’s total, while the leisure segment chipped in RM17.9 million in revenue or 6.7% of group revenue. 

On prospects, I-Bhd said it expects the property development segment to continue to contribute positively to the group’s performance in the current financial year ending Dec 31, 2018 (FY18), as there has been a pick-up in the sales of its 8Kia Peng@KLCC development during the financial period.

In a filing with Bursa Malaysia today, I-Bhd said Phase 4 of SOHO development, which consist of Liberty, Parisien and Hyde towers, will be completed and handed over to purchasers by 3Q2018.

"With the completion of Phase 4 of SOHO development in Shah Alam, as well as the continuous sale of 8Kia Peng, the property development segment result for FY18 is expected to be higher, compared with FY17," it said.

As at June 30, the group’s unbilled sales stood at RM305.4 million, up from RM272.8 million a year ago, and is expected to grow in tandem with the sales of 8Kia Peng.

"The completion of the Phase 4 of SOHO development will also realise a portion of the unbilled sales. Barring any unforeseen circumstances, the board is confident that the group would achieve commendable operating results for FY18," the filing added.

In a separate statement, I-Bhd executive chairman Tan Sri Lim Kim Hong said 2018 is an important year for the group’s first five-year plan that has materialised. He added that I-Bhd will then embark on its next five-year plan.

"The next five-year plan, while building on the foundation that the management team has laid over the past few years, will shift the focus to improving shareholders’ returns," Lim said.

"Over the past three years, I-Bhd has achieved an average return on equity of approximately 7%. We are targeting to achieve a 10% return by the end of the next five-year plan period, driven by a two-pronged strategy of further top line growth and operational improvements," Lim added.

In the next five years, I-Bhd will also move to expand on its usage to enhance operations with technology.

"The group is confident that by providing a cashless infrastructure and facilities within i-City, we will be able to attract the discerning and the quick-adopters of technological advancements, in particular the millennials, to invest in i-City. At the same time, the cashless payment system is also expected to improve productivity and efficiency, reflected by our e-ticket scheme via i-City Mobile App for the leisure park,” Lim said.

"The year 2018 will also be an exciting one for the property investment segment, with the imminent completion and opening of the Central i-City shopping centre this coming year end," he added.  

At 3.40pm, I-Bhd shares were up 0.5 sen or 0.96% at 52.5 sen, with 794,600 shares done, bringing a market capitalisation of RM529.64 million. — theedgemarkets.com

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