IOI Properties – net profits up 120.5% in Q2 FY2019

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When we want to know if the property market is bad or still okay, take a look at the property developers’ results. When the market is bad (nothing gets sold and all new launches go into unsold stocks), it is highly unlikely that the developers would be returning a positive set of results. Let’s understand that the so-called slowdown we have today did not start in 2018. It started in 2013… and there has been predictions year after year about a potential property market collapse. As for developers’ results, earlier was IJM Corp which reported a marginally higher set of profit. There’s now another major developer in Malaysia reporting a good set of numbers.

Article in TheStar.com.my here. IOI Properties Bhd reported that its net profit rose 120.5% from RM97.45 million a year ago to RM214.86 million for its second quarter ending 31st December 2018. Major boost to this number include property development in China and higher share of profit in joint ventures arising from the sale of South Beach Residences in Singapore and foreign currency translation gain. Pre-tax profit was 59% higher at RM342.80mil than the RM215.60mil a year ago. Revenue fell by 4% to RM666.20mil from RM695.41mil because of lower contributions from the property development segment. Its property development reported a 7% decline in revenue of RM519.20mil due to lower progress billings from ongoing projects in Malaysia as the current quarter sales were mainly from completed projects. Article in TheStar.com.my here.

We could see that the numbers look positive but the numbers from local market Malaysia is not as robust as the two contributions from China and Singapore. This tells us that the local property market is slow but is still moving. Hopefully I will read about the results from more developers and could share it here with everyone. I just hope that everyone understands that when times are slow, it’s the best time to buy. I am not so sure if everyone only love the times when we needed to queue up to buy a property or the scene in one property development in Penang where the sales people actually said this, ‘Sir, we are sorry. Everyone is allocated X time to choose a unit because we still have many potential buyers queuing outside…’ Happy following.

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News article summarised by Dina Batrisyia. Article written and edited by Charles.

written on 3 Mar 2019

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