IOI Prop's profit soars in 1st seven months

KUALA LUMPUR: IOI Properties Bhd's net profit surged to RM431.7 million for the first seven months of its financial year ended June 30, 2013 (FY13) compared with RM271.1 million in the corresponding period in the previous year, thanks to its Klang Valley property development.

According to its draft prospectus released last Thursday, its property development segment, had had an average revenue of RM912.9 million for FY12, FY11 and FY10 since it was taken private by parent IOI Corp Bhd in 2009.

It also said for property development in the Klang Valley, Puchong and Putrajaya made revenue contributions of RM1.9 billion and RM193 million, constituting 57.6% and 5.7% of total revenue respectively.

Developments in Johor contributed RM1 billion, 30.4% of total revenue. The developments consisted of residential and retail units, and factories.

IOI Properties is expected to be relisted on the Main Market of Bursa Malaysia this year with total assets of RM15 billion, which could make it the largest listed property company in the country.

The property developer is seeking a re listing and will distribute 2.1 billion shares held by its parent IOI Corp on the basis of three IOI Properties shares for each IOI Corp share.

IOI Properties is also undertaking a non-renounceable restricted offer for sale of 1.08 billion shares to shareholders of IOI Corp on the basis one IOI Properties share for every six IOI Corp shares.

IOI Properties' revenue also includes contributions from its property investment activities, which registered an average revenue of RM97.4 million for FY10, FY11 and FY12.

Property investment revenue was mainly generated from IOI Mall (Puchong), IOI Mall (Kulai), IOI Plaza (Singapore), IOI One & Two Square and PFCC Towers 1 and 2.

The group noted there was no revenue generated from IOI Plaza, Singapore in FY12 and FY13 as it was disposed of in November 2010," it said in its prospectus.

"Moving forward, we will have more investment property in the company when the completion of the 1.4 million sq ft IOI City Mall in IOI Resort City and the office towers in Bandar Puteri. We will see expansion of investment property in our books," IOI Property director Teh Chin Guan told The Edge Financial Daily.

The group's leisure and hospitality business contributed an average of RM66.3 million each year since 2010. The main contributors were Putrajaya Marriott Hotel, the Palm Garden Hotel and two of its golf courses in Putrajaya and Johor.

In its prospectus, the property developer also listed its ongoing developments in Singapore and China.

"We believe that we are in a relatively stronger position than most of our peers as we have approximately 10,000 acres (4,047ha) of undeveloped landbank in Malaysia, Singapore and Xiamen, China.

The group noted that as at Jan 31, 2013, its foreign projects are estimated to generate a total gross development value of S$2.9 billion (RM7.3 billion) in Singapore and 6.1 billion yuan (RM3.16 billion) in China.

IOI Properties also has joint developments with notable property developers including Sime Darby Brunsfield Motorworld Sdn Bhd, Ho Bee Investment Ltd and City Developments Ltd.

This article first appeared in The Edge Financial Daily, on July 15, 2013.

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