IGB posts lower 1Q profit of RM17.7m amid weak property and tourism markets

KUALA LUMPUR (June 11): IGB Bhd posted a 64.25% decline in net profit to RM17.68 million for its first quarter ended March 31, 2020 (1QFY20) from RM49.45 million a year ago, as it faced a weak property market while its hotel business was hit by the Covid-19 outbreak. 

Quarterly earnings per share fell to 2.33 sen from 7.25 sen in 1QFY19, the group said in its filing.

Revenue for the quarter fell 12.69% to RM291.42 million from RM333.76 million, owing to weaker contributions across the board led by property development and hotel businesses, which offset gains in its two property investment divisions (retail and commercial).

IGB’s hotel division reported a loss in 1QFY20, while its property development business, which does not have any project under construction currently, recorded weaker sales of completed Stonor 3 condominium units. As for its construction and others' segments, losses widened.

Its retail property investment division was also hit by depreciation and a bump in finance costs.

Only its commercial property investment business saw marginally higher earnings, as average occupancy rates remained above 80%.

“The Group will not be spared from the negative impact of the pandemic. It is still early now to quantify the financial effects on the Group’s results for the current financial year ending Dec 31, 2020, which will to a large extent be dependent on the duration of the COVID-19 crisis and the continued negative impact on economic activity.

“However, the group has taken steps to mitigate the impact by taking measures to reduce operating expenses as well as assessing the various government assistance measures which may be applicable to the group,” IGB said on its prospects for the rest of the year.

Shares of IGB closed 15 sen or 5.26% lower at RM2.70, valuing the group at RM2.4 billion.

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