IOI Properties records higher revenue and operating profit in 6MFY21

PETALING JAYA (Feb 22): IOI Properties Group Bhd's (IOIPG) revenue grew 13% year-on-year (y-o-y) to RM1.3 billion while operating profit was 7% higher to RM511.2 million in the first six months of financial year 2021 (FY2021) amidst the challenging business environment.

In a media statement today, the improvement in revenue and operating profit was mainly due to higher-than-expected contribution from its operations in Xiamen, China. For the period ended Dec 31, 2020, the company recorded a total sales value of RM916.4 million.

IOIPG CEO Datuk Voon Tin Yow (pictured)  anticipated the measures announced in Budget 2021 and Home Ownership Campaign will continue to stimulate the property market in Malaysia, boosting demand for mid-priced range products offered by IOIPG in its integrated developments.

With the overnight policy rate (OPR) at a historical low of 1.75% during the period under review, Voon noted that the current low interest rate bodes well for the growth of the property market as the lower OPR offered opportunities for property purchasers to secure bank loans with attractive interest rates. 

“This would continue to generate buying interest, benefitting the group as it offers a range of high-quality products in strategic locations,” he added.

For the second quarter ended Dec 31, 2020, IOIPG registered a net profit of RM172.3 million compared with RM215.1 million in the preceding year's corresponding quarter. Meanwhile, revenue for the Group was RM591.3 million, an increase of 5% from RM564.1 million in the preceding year's corresponding quarter which was mainly attributable to the property development segment.

The property development segment contributed RM494.9 million in revenue and RM192.6 million in operating profit in second quarter FY21, a jump of 20% and 19% respectively from the preceding year's corresponding quarter. 

This improvement in revenue and operating profit was mainly driven by higher-than-expected sale contribution from its operations in China. Revenue and operating profit for the property investment segment were at RM73.6 million and RM31.3 million respectively while the hospitality and leisure segment recorded a revenue of RM21.1 million.

IOI Palm City Mall in Xiamen, China which is slated to open by the third quarter of 2021, has secured high occupancy; and the construction of boutique office blocks and Sheraton Grand Hotel is progressing well.

Although the reinstatement of MCO has dampened the recovery of the property investment, and hospitality and leisure segments, the company’s hospitality and leisure segment will maintain its aggressive marketing and promotion packages, whilst implementing cost optimisation strategies by progressively right-sizing the workforce in preparation for medium and long-term recoveries.

Meanwhile, the property investment segment comprising retail and office will continue to adopt active and pragmatic tenant retention strategies to maintain occupancy rates; as well as to improve tenant mix in positioning its malls as retail destinations of choice. 

“The Group supported its tenants with rental relief valued at more than RM45.3 million from March to Dec 2020,” said Voon in the media statement.

In Singapore’s Central Business District, the construction of the Central Boulevard office development has resumed since Aug 2020. Effort is being made to catch up on lost time resulting from the Circuit Breaker imposed by the Singapore government in April 2020.

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