TA Global expects lower earnings from property division

KUALA LUMPUR: TA Global Bhd, the property arm of stockbroker TA Enterprise Bhd, expects earnings from its property development division to be lower in the financial year ending Jan 31, 2015 (FY15) due to lower demand for higher priced properties and rising cost pressure.

It however said it will continue to focus on its Damansara Avenue project — 19.42ha upscale mixed development in Bandar Sri Damansara — and will be launching some new projects in FY15 to sustain its earnings from property development.

In a filing with Bursa Malaysia yesterday, TA Global said it is also projecting lower earnings contributions from its overseas and local property investments in FY15 in view of the expected upgrading works to be undertaken at some of the projects.

“[However], we are confident that these upgrading works will generate higher returns for the group in the future,” it said.

As for its hospitality business which spans Singapore, Australia and Thailand, TA Global said it will continue to generate a stable recurrent income stream for the group.

“The growth and performance of our hospitality business in China and Canada in FY15 will be driven by and dependent on the respective countries’ economic growth.

“We will continue to explore and evaluate opportunities to acquire new hotel properties to expand our existing hotel portfolio and to enhance the revenue contribution of our hospitality division.”

Nevertheless, the group expects to remain profitable in FY15.

It said finance and related services will remain as part of the group’s business strategy to support the property development and property investment divisions. The group will continue to seek investment opportunities to maximise finance income, said TA Global.

The group saw its net profit jump 43% to RM60.91 million for the fourth quarter ended Jan 31, 2014 (4QFY14) from RM42.59 million previously, mainly contributed by the finance and related services division due to significant loan recovery from financial receivables.

Revenue for 4QFY14 rose 26% to RM231.78 million from RM184.54 million earlier.

For the full FY14, the group’s net profit grew 33% to RM123.9 million from RM93.43 million in FY13, while revenue increased 9% to RM692.44 million from RM638.01 million.

This article first appeared in The Edge Financial Daily, on April 3, 2014.


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