KUALA LUMPUR (May 31): Property group IGB Bhd's net profit more than halved to RM34.08 million in the first quarter ended March 31, 2018 (1QFY18) from RM73.17 million, dragged by losses from associates, absence of a one-off disposal gain and write-back of deffered tax relating to the disposal.
IGB's quarterly earnings per share dropped to 5.43 sen, from 12.03 sen in 1QFY17.
Minus the one-off item from the disposal of Renaissance Kuala Lumpur Hotel worth RM34 million in the corresponding quarter last year, IGB's core net profit would still be 6.96% lower year-on-year at RM68.08 million.
This was despite quarterly revenue rising 4.49% to RM294.2 million, from RM281.55 million previously, amid higher contribution from the property investment — retail and property development divisions.
For its property investment — commercial division, IGB's average occupancy rate of 80% with average rental rate of RM6 per square feet were "comparable" to the previous year, said the group.
Revenue for the property development division more than doubled to RM17 million from RM6 million previously, thanks to the completion of its 31-unit Damai Residence condominium in Jalan Ampang last April.
"The other project currently under construction at about 40% completion is 'Stonor 3', a 400-unit condominium located in the vicinity of KLCC," it said.
Meanwhile, revenue contribution from its hotel operations slipped 10% to RM75.1 million, no thanks to lower average occupancy rates in "most of the local hotels".
IGB expects its property investment arm to perform satisfactorily moving forward, amid a challenging market environment for property investment in the short run with impending increase in retail supply while demand slows in Kuala Lumpur.
It also shared a weak sentiment for the property development arm in 2018.
"Notwithstanding the lower contribution during the first quarter of 2018, the board expects a stable performance from the hotel segment," it added.
Shares of IGB closed unchanged at RM2.94 apiece, giving it a market capitalisation of RM2.03 billion.