GuocoLand 3Q net profit surges sixfold, lifted by disposal gains

This article first appeared in The Edge Financial Daily, on April 24, 2018.
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KUALA LUMPUR: GuocoLand (Malaysia) Bhd reported an almost sixfold increase in its net profit to RM55.69 million for the third quarter ended March 31, 2018 (3QFY18), from RM8.34 million in the previous year’s corresponding quarter, due to the gain on disposals of several assets during the quarter.

The group disposed its entire interests in JB Parade Sdn Bhd and PD Resort Sdn Bhd to GuocoLand Hotels Pte Ltd, resulting in a gain of approximately RM104.8 million.

Meanwhile, quarterly revenue declined 56% to RM35.83 million from RM81.17 million a year earlier, due to lower contributions from the residential project in Oval and the absence of contributions by PJ City Parcel A Phase Two.

For the cumulative nine months ended March 31, 2018 (9MFY18), its net profit dropped 52% to RM57.72 million from RM119.42 million in the previous year. Revenue jumped 90% to RM289 million from RM152.31 million.

On prospects, the group said it expects the local property market to remain lacklustre, amid weak market and consumer sentiments, as well as Bank Negara Malaysia’s 25 basis point increase in the overnight policy rate.

“The overall momentum and prospects of the property market in one to two years are expected to remain soft and challenging.

“As property development is the key driver of our business operations moving forward, the group will remain steadfast in launching its projects according to prevailing market sentiments,” GuocoLand said.