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Tropicana 4Q net profit surges on proceeds from land sales

KUALA LUMPUR (March 25): Tropicana Corp Bhd’s net profit surged 231.43% to RM48.08 million for the fourth quarter ended Dec 31, 2020 (4QFY20) from RM14.51 million in the preceding quarter.

The group attributed this to the sale of two parcels of freehold development land for RM98.1 million. On top of that, Tropicana saw higher sales and progress billings across key projects in the Klang Valley and Southern Region.

Quarterly revenue rose 59.3% to RM356.69 million, from RM223.97 million in 3QFY20, Tropicana reported in a filing with Bursa Malaysia.

Year-on-year, Tropicana’s 4QFY20 net profit was down 78.03% compared with RM218.88 million in 4QFY19. Revenue fell 6.3% from RM380.5 million due to lower progress billings amid Covid-19 restrictions.

Tropicana said its bottom line was down due to the recognition of negative goodwill when it acquired lands by acquiree companies from a related party, which had an average discount of 13.4% to the market value of these lands. The acquisition was completed in November 2019.

For the full financial year, Tropicana’s net profit declined 71.3% to RM92.03 million from RM320.76 million in FY19.

Full-year revenue was 6.8% lower at RM1.06 billion from RM1.14 billion.

Tropicana said its FY20 unbilled sales stood at RM1.09 billion. Its land bank was 2,114 acres with a total potential gross development value of RM78 billion.

Tropicana managing director Dion Tan, in a statement, expressed cautious optimism on the group’s growth prospects.

"We are mindful of the challenges presented to our group as the result of the pandemic. We are closely monitoring our key performances and are cautiously optimistic of all our projects’ potential, especially those located in strategic regions,” he said.

“Our Tropicana 100 campaign is drawing a steady flow of interest, signalling a gradual recovery in the property market. We will continue to progress by maintaining stringent cost-efficiency measures, digital realignments, and careful rationalisation of our launches in our aim to build a more resilient and agile corporation," Tan added.

Tropicana also announced today the appointment of Datuk Dr Teo Tong Kooi, 63, as an independent and non-executive director. He is currently the independent non-executive chairman of Rubberex Corp (M) Bhd.

Shares in Tropicana finished unchanged at 88.5 sen, valuing the group at RM1.3 billion. The counter saw 186,100 shares traded.

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