Press Release: IOI Properties Group registered revenue growth across all its business segments in Q2 FY2022
IOI Properties Group Berhad’s (IOIPG) revenue increased by 19% to RM704.8 million in the second quarter ended 31 December 2021 (Q2 FY2022) compared to preceding year corresponding quarter, with improved financial performance across all its business segments in property development, property investment, and hospitality and leisure. The Group achieved RM125.3 million in net profit in the same quarter, after taking a fair value loss of RM98.4 million attributed
to IOI Mall, Xiamen. Otherwise, the Group’s profit before taxation of RM331.3 million in Q2 FY2022 is 21% higher than the preceding year corresponding quarter.
Revenue and operating profit for property development segment increased by 15% to RM571.6 million and by 7% to RM206.5 million respectively in Q2 FY2022 compared to preceding year corresponding quarter. This was contributed by higher sales from operations in Malaysia, driven by dynamic sales and marketing campaigns as well as the extension of the Home Ownership Campaign to 31 December 2021. The vaccinated travel lane arrangement between the Malaysian and Singaporean governments has also contributed to better financial performance as it facilitated the business process of property transactions in the Group’s developments located in Johor.
The Group’s financial performance of its property investment segment has improved after the Movement Control Order in Malaysia was lifted and lower rental relief assistance was given to tenants. This was also due to the commencement of recurring leasing income from IOI Mall, Xiamen, which started operations on 28 October 2021. This resulted in higher revenue of RM96.7 million and operating profit of RM49 million in Q2 FY2022, which constituted an increase of 31% and 57% respectively compared to the preceding year corresponding quarter.
For hospitality and leisure segment, revenue surged 57% to RM33.1 million and operating loss reduced by 84% to RM1.2 million in Q2 FY2022 compared to preceding year corresponding quarter mainly due to higher room occupancy rate and an increase in patronage at the hotel’s food and beverage outlets.
In view of the rebound of Malaysia’s GDP by 3.6% in the fourth quarter of 2021 and the easing of movement control restrictions which allowed for more economic activities to resume, IOIPG Chief Executive Officer Dato’ Voon Tin Yow said that the property industry is likely to recover in tandem with the recovery in the overall economy of Malaysia.
“We anticipate stronger recovery of the nation’s economy in 2022, aided by continuous expansion in domestic and global demand for goods and services. Economic activities will continue to recover and the labour market conditions are expected to improve. Malaysia has recorded a high rate of vaccination amongst its adult population and the vaccination of children has also commenced in February. These positive developments in the country will continue to sustain the recovery of business activities which will then contribute to a recovery in the property industry,” he added.
Nonetheless, the Group is cognisant of the various headwinds that could disrupt economic activities. These include the on-going pandemic, disruption in global supply chain, rising cost of building materials and shortage of workers.
Amidst these challenges, the Group will continue to bank on its digital marketing capabilities and aggressive campaigns to boost sales of its mid-priced range of products in the property development segment. As for the Group’s retail business, IOIPG’s digital marketing and innovative solutions will continue to provide value proposition for its malls’ tenants and customers. Besides that, the Group remains committed to providing a safe environment and enforcing the latest standards of safety management for its hotel guests and staff.
Meanwhile, to mitigate the impact in rising cost of building materials, IOIPG has formed a new business unit mainly involved in sourcing and supplying building materials. In the international front, the on-going construction of IOI Palm International Parkhouse Xiamen, China is due for completion in Q2 FY2023. Together with IOI Palm City, both these residential developments will contribute to the Group’s financial performance in the coming quarters.
IOIPG has widened its footprint in Singapore with the recent acquisition of a new development site at Marina Bay. The site, which is planned for a mixed-use development comprising residential and hotel components, will complement existing developments by the Group in the city-state.
Despite operating in a challenging environment, the management of IOIPG backed by a strong and innovative workforce remains Trusted. to consistently deliver excellent products and services that exceed expectations.
Property News Malaysia? Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER). Alternatively, Follow me on Telegram here.
Next suggested article: IOI Properties Group stays resilient despite challenges arising from COVID-19 pandemic