IOI Properties' earnings improve in 1QFY22 despite challenging business environment

IOI Properties' earnings improve in 1QFY22 despite challenging business environment
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KUALA LUMPUR (Nov 26): IOI Properties Group Bhd saw its net profit for its first financial quarter ended Sept 30, 2021 (1QFY22) grow 8.7% to RM208.81 million from RM192.11 million a year ago, on higher other operating income and share of results of joint ventures and an associate.

This resulted in a higher earnings per share of 3.79 sen for 1QFY22 compared with 3.49 sen for 1QFY21.

However, quarterly revenue came in 34.5% lower at RM431.77 million compared with RM659.67 million a year ago, mainly due to disruption to the group’s operations from the reimposition of the Movement Control Order (MCO) by the government.

The property development segment recorded revenue of RM363.2 million in 1QFY22, down 34% from RM549.7 million a year ago, mainly due to lower sales contribution from both Malaysia and China operations.

Its property investment revenue for 1QFY22 also fell 29% to RM59.2 million from RM83.2 million in 1QFY21 as it gave out rental relief assistance to tenants due to MCO 3.0, and lower occupancy.

As for its hospitality and leisure segment, quarterly revenue fell 69% to RM7.6 million in 1QFY22 from RM24.5 million in 1QFY21 due to lower occupancy rates impacted by travel restrictions to curb the spread of Covid-19 infections.

IOI Properties has 27 on-going projects under construction in Malaysia, Singapore and Xiamen, China.

“We are confident that Malaysia’s economy is on the path of recovery to pre-pandemic levels as most sectors of the economy are allowed to operate at full capacity under the new normal. The vaccination rate among the adult population in Malaysia has surpassed 95% and the country is transitioning towards an endemic phase. Therefore, we expect to see growth picking up across economic sectors,” IOI Properties chief executive officer Datuk Voon Tin Yow said in a statement on Friday.

Going forward, IOI Properties said it will continue to leverage on its digital marketing capability and aggressive campaigns to drive sales of its mid-priced range of products in tandem with market demands.

"We will also focus our efforts on developing offerings that capitalise on government-driven support initiatives for the property development sector," it said in a separate filing with Bursa Malaysia.

Additionally, it is intensifying its efforts to catch up on time lost in the construction of IOI Central Boulevard Towers in Singapore following from the successive disruptions caused by the Covid-19 outbreak.

"In the meantime, businesses have been picking up for the group’s retail and hospitality segments in Malaysia, following the reopening of the economy by the government. We will continue with digital marketing and innovative solutions to provide value proposition for our mall tenants and customers alike.

"Overall, we expect the operating environment to remain challenging. Nevertheless, the group will continue with its prudent and professional management approach to ensure delivery of satisfactory performance in the coming quarters while improving its market position and strengthening its competitive edge to seize any opportunities that may emerge," said IOI Properties.

IOI Properties shares closed down one sen or 0.9% at RM1.10, bringing it a market capitalisation of RM6.06 billion.

Kang Siew Li