Tropicana 3Q net profit up 11% on lower tax expenses

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KUALA LUMPUR (Nov 26): Property developer Tropicana Corp Bhd's net profit rose 10.5% to RM34.15 million in the third quarter ended Sept 30, 2018 (3QFY18) from RM30.91 million a year ago, mainly due to lower tax expenses.

Its earnings per share increased to 2.34 sen for 3QFY18 from 2.11 sen for 3QFY17.

Quarterly revenue, however, fell 33% to RM307.11 million from RM458.03 million a year ago, on lower sales and progress billings from the various stages of construction work for the group’s existing on-going projects scheduled for completion in late 2018 and 2019.

For the cumulative nine months (9MFY18), the group's net profit increased 13.5% to RM118.55 million from RM104.45 million a year ago, which it attributed to prudent cost-saving efforts from its projects.

Revenue, however, fell 18% to RM1.04 billion from RM1.27 billion in 9MFY17, on lower sales and progress billings across projects in the Klang Valley, as well as southern and northern regions.

Tropicana said it has unbilled sales of RM918.3 million to date,
anchored by 15 on-going projects, placing it in a strong position to deliver sustainable earnings performance for the remaining year.
"Against a challenging but growing property scene and cautious consumer sentiment, the group believes that there will still be demand for landed properties and integrated developments in prime locations with accessibility to good amenities and attractive pricing," it added in a statement today.

Going forward, Tropicana said its strategy will remain focused on being market driven and unlocking the value of its strategic landbank of 1,126.9 acres with a potential gross development value (GDV) of RM46.6 billion, located in the Klang Valley, Genting and southern regions of Peninsular Malaysia.

"Plans have already been put in place to roll out new phases across its signature developments amounting to GDV of more than RM430 million. These comprise the second phase of commercial shop lots at Tropicana Aman, Kota Kemuning; the fourth landed residential phase at Tropicana Heights, Kajang, as well as a new commercial phase at Tropicana Metropark which are expected to contribute positively to the group’s earnings for the coming years," it said.

Tropicana shares closed down 0.5 sen or 0.58% at 86 sen today, valuing it at RM1.27 billion.