Yong Tai in the red for 2nd consecutive quarter as revenue halves

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KUALA LUMPUR (Feb 25): Yong Tai Bhd reported its second consecutive quarter in the red, with a net loss of RM5.92 million for the second quarter ended Dec 31, 2018 (2QFY19), as revenue halved on weaker contribution from its property development segment and losses from its property investment business.

In comparison, the group recorded a net profit of RM4.53 million in the previous year's corresponding quarter, when it recorded a revenue of RM41.46 million, which has fallen to RM21.21 million in 2QFY19.

In a filing with the bourse, Yong Tai said the lower contribution from the property development segment was mainly due to the lack of contribution from Terra Square.

“Furthermore, the property market remains soft due to the tight lending policy and [because] property buyers are more cautious,” said the group.

The development projects that contributed to Yong Tai’s performance in 2QFY19 were: The Apple, Amber Cove, The Dawn and Impression U-Thant.

As for its property investment division, Yong Tai said it recorded lower-than-expected ticket sales for Encore Melaka, amid a fall in tourist arrivals in Malaysia, particularly from mainland China, coupled with non-operating expenses such as depreciation and interest charges which are no longer capitalized after the commencement of theatre operations.

For the first half of its financial year [1HFY19], Yong Tai recorded a net loss of RM11.14 million, compared with a net profit of RM7.22 million in the same period last year, while revenue fell 26% to RM50.36 million from RM67.99 million.

“The ticket sales for the first six-month period ended Dec 31, 2018, is below expectation. While there is sign of lower-than-expected Chinese tourist arrivals momentarily, the group believes that the sentiment will recover in the near future.

“Meanwhile, the group is targeting tourists’ markets from Singapore and other Asian countries such as Korea, Vietnam, Taiwan and Hong Kong,”  the group said of its prospects.

On the other hand, Yong Tai said the Malaysian property sector remains subdued amid tighter lending policies, while foreign investors remain cautious due to current market conditions.

It hopes that government initiatives announced in Budget 2019 will help boost market sentiment.

“With total unbilled sales of RM391 million, the group will stay focused on developing its ongoing development projects, namely The Apple, Amber Cove, The Dawn and Impression U-Thant. All these projects will begin contributing to the group’s financial results in FY2019, as and when they move into an advanced stage of development,” the group added.

Yong Tai fell 1 sen or 2.74% to close at 35.5 sen today, giving it a market capitalisation of RM172.4 million.