It’s not an easy time for property development. So, it’s not a great time for developers. Those who has more flexibility is pushing back or relaunching some developments with some tweaks in sizes and prices. In fact as most of the statistics are showing, new launches are mostly below RM500k these days. Great time for potential home owners actually versus those times when this was common. “You only have 5 minutes to choose your unit. There are so many other potential buyers.” Yes, I know because my friend lost in buying one condo unit by a mere 10 seconds. The latest result for IOI Properties Group Berhad below:
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IOI Properties Group Berhad (“IOIPG”) announced its Q1 financial results for the financial period ended 30 September 2016. The Group continues to deliver better performance amidst the current soft property market due to weak consumer sentiment and tight lending conditions. IOIPG recorded revenue and profit before taxation of RM899.5 million and RM289.5 million respectively for the current quarter, which is RM304.3 million or 51%; and RM81.2 million or 39% respectively higher than the preceding year corresponding quarter.
The Group’s operating profit of RM270.4 million for the current quarter is RM58.4 million or 28% higher than the preceding year corresponding quarter. The increase in both revenue and operating profit are mainly attributed to the Group’s better performance in its three main business segments, namely property development, property investment as well as leisure and hospitality. On this encouraging Q1 financial standings, the Group is optimistic that the local property market is expected to consolidate despite the challenging global economic environment with the demand for properties in the medium price range category to remain resilient.
The Group’s property development segment contributed revenue and operating profit of RM793.6 million and RM223.5 million respectively in the current quarter, an increase of RM291.4 million or 58% and RM46.0 million or 26% respectively compared to the preceding year corresponding quarter. The increase in both revenue and operating profit is mainly contributed from higher sales take-up rates for overseas projects in both Singapore and Xiamen, PRC as well as projects in IOI Resort City Putrajaya and Warisan Puteri @ Sepang.
Its property investment segment also recorded better revenue and operating profit of RM71.3 million and RM42.5 million respectively, an increase of 17% and 43% respectively compared to the preceding year corresponding quarter. This is mainly attributed to IOI City Mall’s increased average occupancy rates from 88% to 94% and upward rate revision upon tenancy renewal. Apart from this, the ideal locations of the Group’s property investments portfolios; within matured townships and high growth corridors have also contributed to healthy occupancy rates and rental yields.
Meanwhile, the Group’s leisure and hospitality segment recorded a RM2.1 million or 7% increase in revenue, to RM32.5 million in the current quarter as compared to preceding year corresponding quarter. The increase in revenue is mainly attributed to Four Points by Sheraton, Puchong and Le Meridien Putrajaya, with the latter commencing its business operations in August 2016. Its Chief Executive Officer Lee Yeow Seng commented that, “The Group will continue to focus on improving its group synergies to remain resilient and competitive.” On 22 August 2016, the Board has declared an interim single tier dividend of 8.0 cents per ordinary share, amounting to RM352,897,216 in respect of the financial year ended 30 June 2016.
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