Tambun Indah 2Q net profit down 23% on fewer on-going projects

KUALA LUMPUR (Aug 22): Tambun Indah Land Bhd saw its net profit fall 23.3% in the second quarter ended June 30, 2018 (2QFY18) to RM15.08 million from RM19.66 million a year ago, mainly due to fewer on-going projects as the Penang-based property developer adopts a cautious approach given the overall soft market condition.

The group recorded new property sales of RM31.24 million in 2QFY18 compared with RM47.9 million in 2QFY18.

Earnings per share also came in lower at 3.48 sen for 2QFY18 compared with 4.56 sen for 2QFY17. Quarterly revenue dropped 30.7% to RM48.14 million from RM69.45 million in 2QFY17.

The weak quarterly performance dragged the group's net profit for the cumulative six months (1HFY18) down 38.5% to RM26.43 million from RM42.95 million a year ago, while revenue also fell 4.8% to RM88.22 million from RM148.94 million in 1HFY17.

In a filing with Bursa Malaysia yesterday, Tambun Indah said property development projects were on track and progressed as scheduled in 2QFY18. Revenue was mainly contributed by residential property developments in Pearl City, Simpang Ampat, which accounted for 99% of the total revenue in the segment for the current quarter in review.

As at June 30, 2018, the group achieved an average take-up rate of 73.9% for its ongoing projects, with a total gross development value of RM770 million and unbilled sales of RM31.85 million.

"These should contribute positively to the group’s earnings for the next two years," said Tambun Indah.

"The outlook for the property industry continues to be challenging. Subject to successful implementation of the projects, the group expects to achieve satisfactory performance in the current financial year ending Dec 31, 2018," it added.

Tambun Indah shares closed up 1.5 sen or 1.54% at 99 sen yesterday, for a market capitalisation of RM428.99 million. — theedgemarkets.com

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