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IOI Properties' Q3 profit falls due to Covid-19 pandemic

KUALA LUMPUR (May 30): IOI Properties Group Bhd’s (IOIPG) net profit in the third quarter (Q3) ended March 31, 2020, fell 63% to RM71.36 million from RM194.70 million a year earlier.

Revenue for the quarter declined to RM401.43 million against RM487.74 million previously.

The property development and investment group, which also operates hotels and resorts, attributed the decrease in revenue to the lower performance from all operating segments due to the disruption to operating environment as a result of the Covid-19 pandemic.

In a filing with Bursa Malaysia yesterday, it said the operating profit from the property development segment shrank 29% year-on-year to RM85.5 million in Q3 while that from property investment contracted 22% to RM40.1 million.

Its hospitality and leisure business, meanwhile, swung to an operating loss of RM5 million from an operating profit of RM3.8 million in the year-ago quarter.

In a separate statement, the group said it anticipated its developments in strategic locations around Malaysia along with its projects in the pipeline would continue to draw prospective buyers as the economy gradually improved post-Conditional Movement Control Order (CMCO).

In China, economic activities have resumed and are in recovery mode after the lockdown due to the spread of the Covid-19 pandemic.

IOIPG said the group’s recent launch of high-rise condominiums in IOI Palm City, Xiamen, received favourable response with a take-up rate of 80%, and profits would be registered in the coming quarters.

For the first nine months of this financial year, IOIPG recorded RM1.51 billion in revenue against RM1.70 billion in the same period last year. Net profit fell about 22% to RM407.74 million.

Despite restrictions, IOIPG said the group’s sales in the Klang Valley was not very much affected with some products moving even faster during the MCO period due to aggressive sales packages such as the “[email protected] Online Sales” and the ongoing “Instalment Also Free”.

IOIPG has constantly been improving on its digital marketing capabilities and has set up an e- marketplace platform to conduct sale transactions before the implementation of the MCO.

“We will continue to leverage on our digital marketing capabilities, accelerate sales via online platforms and adopt aggressive sales and marketing strategies with focus on the Group’s mid-price range of properties in Malaysia,” said chief executive officer Datuk Voon Tin Yow.

He said the remaining period of financial year 2020 would continue to be challenging but the group was well positioned for the recovery post-CMCO.

Voon also said the pandemic outbreak was expected to affect the performance of the retail and hospitality segments.

However, the group is actively adopting a pragmatic tenant retention strategy for occupancy optimisation in anticipation of a less restricted movement environment.

“Moving forward, we have mid-price range of projects in the pipeline ready to be launched once we have assessed that the market is ready post-CMCO.

“So far, we have about 40 ongoing projects and a total development landbank of about 10,000 acres,” he added.

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