KUALA LUMPUR (June 25): TA Global Bhd saw its net profit contracted 11.45% to RM72.17 million, or 1.36 sen a share, for the first quarter ended April 30, 2015 (1QFY16) against RM81.5 million, or 1.53 sen per share a year ago, mainly dragged by losses in the investment holding and property development divisions.

TA Global’s (fundamental: 1.2; valuation: 2) quarterly revenue declined to RM140.66 million from RM158.2 million for the same quarter last year, according to a filing to the Bursa Malaysia today.

The property developer said that its investment holding division reported loss before tax of RM1.3 million in the current first quarter, as compared to profit before tax of RM22.2 million last year.

“Despite gain recognised on disposal of an associate company, the significant decrease was mainly due to the absence of realised foreign exchange gain upon partial settlement of Canadian Dollar denominated promissory notes in the previous year’s corresponding quarter,” it said.

Meanwhile, property development division registered a loss before tax of RM6.3 million versus a profit before tax of RM2.9 million last year mainly due to increase in finance cost and operational cost for the ongoing project in Malaysia and Australia, it said.

On the other hand, its finance and related services division reported profit before tax of RM62.1 million as compared to profit before tax of RM35.4 million last year, mainly due to higher fair value gain and higher interest income from investment securities.

For property investment division, a profit before tax of RM4.7 million was recorded against profit before tax of RM3.2 million in 1QFY15, contributed by higher rental income generated from the investment properties, TA Global said.

Its hotel operations division registered net operating profit of RM24.6 million, as compared to RM26.7 million in the previous year’s corresponding quarter.

“The slight decrease was mainly due to lower occupancy rate of the Movenpick Resort, Phuket and Swissotel Merchant Court, Singapore which are currently under major renovation,” it said.

Although the recovery in the US economy is gaining momentum, TA Global expects the global economy to remain subdued in view of the lower oil prices and China’s slowdown in growth.

In addition, it foresees the domestic economy will remain challenging due to slower export growth and a moderation in consumption following the implementation of goods and services tax on April 1.

“Barring any unforeseen circumstances, the group will continue to be profitable in the financial year ending Jan 31, 2016,” it said.

TA Global's share price closed unchanged at 32 sen with a market capitalisation of RM1.70 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)