Tropicana Corp 2Q profit rises after disposal of JB land

KUALA LUMPUR (Aug 20): Tropicana Corp Bhd’s second quarter net profit jumped 371% from the immediate preceding quarter, thanks to the disposal of two parcels of freehold land in Johor Bahru for RM248.1 million.

The group’s bourse filing yesterday showed its net profit for the quarter ended June 30, 2020 (2QFY20) rose to RM24.29 million from the RM5.16 million in 1QFY20.

Revenue jumped 135.2% quarter-on-quarter to RM335.67 million from RM142.73 million, following the disposal of the land.

On a year-on-year basis, the net profit was down 37.76% compared with RM39.02 million in 2QFY20, while revenue rose 12.1% from RM299.45 million.

Tropicana said excluding the proceeds of the Johor land sand, its revenue was lower during the quarter due to lower sales and progress billings across its existing ongoing projects as a result of the Covid-19 pandemic, which saw activities halted under the Movement Control Order (MCO) from mid-March.

For the first half of the year, the group saw its net profit fall by 65.39% to RM29.45 million, from RM85.09 million a year earlier.

Half-year revenue declined by 6.1% to RM478.4 million, from RM509.22 million previously.

In a separate statement, Tropicana said as at the end of the first half of FY20, its unbilled sales stood at RM679.4 million, with its land bank standing at 2,344 acres with a potential gross development value (GDV) of RM70 billion.

For the second half, the group is expecting to roll out new developments and phases with a GDV of RM1.8 billion across its townships.

These new launches include the Tropicana Miyu condominiums on Jalan Harapan, Petaling Jaya that will be launched in 3QFY20, a new landed residential phase at Tropicana Aman, Kota Kemuning and shop offices at Gelang Patah, Johor.

Tropicana is also targeting to launch its first integrated master-planned development, Tropicana Grandhill in Genting Highlands, in 4QFY20. The first phase of the 112-acre township is the TwinPines Serviced Suits, consisting of two towers of full-furnished serviced apartments.

The property developer said while growth prospects are expected to be subdued in the short-term, there will still be demand in prime locations, especially for first-home buyers. It said the recent overnight policy rate cut to 1.75% and the introduction of the Home Ownership Scheme will help to stimulate the domestic housing market.

“Meanwhile, with the Malaysian property market expected to see a modest recovery in 2020, the group will continue to be focused on being market-driven in its product offerings, while unlocking value of its landbank in strategic locations in the Klang Valley, Genting Highlands and the southern regions of Peninsular Malaysia,” it said.

Tropicana shares closed unchanged yesterday at 90 sen, valuing the group at RM1.32 billion.

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