KUALA LUMPUR: Property developer Tropicana Corp Bhd’s net profit fell 22.5% to RM198.66 million for the fourth quarter of financial year 2014 ended December (4QFY14) from RM256.45 million a year ago, on lower contribution from its property investment and resort operations segment. This was despite revenue for 4QFY14 more than doubling to RM964.29 million from RM444.68 million a year ago due to higher revenue recognitions across key projects within Greater Kuala Lumpur and Iskandar Malaysia in Johor and a gain on land sales of RM167.9 million in Tropicana Aman. Earnings per share (EPS) for 4QFY14 was lower at 14.24 sen from 23.18 sen in 4QFY13.

For the 12-month period (FY14), Tropicana’s (fundamental: 1.3; valuation: 3) net profit dropped 7.8% to RM333.94 million from RM362.31 million in FY13. Revenue for FY14 rose 33.7% to RM1.97 billion from RM1.48 billion in FY13, while EPS was 24.85 sen compared with 34.31 sen. Tropicana attributed the improved revenue for FY14 to higher revenue recognitions across key projects within Greater Kuala Lumpur and a RM470.7 million revenue gain from land sales. In a statement yesterday, Tropicana said it chalked up new sales of RM1.5 billion as at Dec 31, 2014.

“We have secured unbilled sales of RM2.7 billion, which places us in a very good position to deliver sustainable performance in 2015,” it said.

Tropicana said although the property market is expected to remain challenging in 2015, it believes it has the right product mix, such as landed properties and integrated developments in good locations with great accessibility and attractive pricing, that will continue to appeal to buyers.

The group intends to focus more on development activities within the Klang Valley this year, where Tropicana has more than 1,000 acres (404.68ha) of development land, with a potential gross development value (GDV) of RM24.5 billion. This includes the 863-acre Tropicana Aman in Canal City, earmarked for an integrated township with potential GDV of RM13 billion, for which the maiden launch is expected this year. “The group is also preparing to launch new phases of terraced homes in Tropicana Heights, Kajang, and the third serviced apartment block in Tropicana Gardens, an integrated mixed development located in Kota Damansara with a direct link to the Surian MRT station,” said Tropicana.

The counter closed unchanged at RM1.04 yesterday, for a market capitalisation of RM1.43 billion.

This article first appeared in The Edge Financial Daily, on February 12, 2015.