IOI Prop posts jump in first quarter earnings

IOI City Mall is part of a mixed development at the edge of Putrajaya that includes office towers and Le Meridien Hotel. - Filepic

IOI City Mall is part of a mixed development at the edge of Putrajaya that includes office towers and Le Meridien Hotel. - Filepic

KUALA LUMPUR: IOI Properties Group Bhd (IOI Prop) posted a 28.1% jump in earnings to RM242.85mil for the first quarter ended Sept 30, 2017, on higher profits in all its main business segments.

All three of its main business segments – property development, property investment, and leisure and hospitality – recorded improved operating profits although total revenue slipped 3.3% to RM869.98mil.

The earnings were up due to improved sales of properties, higher occupancy and rental rates for its retail segment, and the contribution from Le Meridien by Starwood in Putrajaya, which opened in August last year, IOI Prop told Bursa Malaysia.

On the decrease in revenue, it said this was mainly due to lower contribution from the property development overseas.

“The higher revenue in the preceding year’s corresponding quarter was mainly due to higher take-up rates from the overseas projects in both Singapore and Xiamen, China,” it explained.

On the group’s prospects, IOI Prop said demand for its properties remained positive following improvement in sales take-up rates in strategic locations across Malaysia and overseas.

“The group expects the property market to scale up to firmer ground, barring any surprises on the international and domestic front. Overall, the property development segment both in Malaysia and overseas is expected to perform satisfactorily,” it added.

In a media statement, IOI Prop chief executive officer Lee Yeow Seng said the group expected the property market, currently facing challenging conditions, would continue its steady recovery into 2018 with an increased demand for sustainable lifestyle developments in well-established growth areas.

According to him, the group is well-positioned to adapt to these market demands with its focus on quality and value creation as well as its sizeable land bank in high-growth corridors.

“On the international front, the group’s key developments are expected to commence soon, notably the development of Grade A office towers and retail podium in the prime Central Business District located within Marina Bay, Singapore and a mixed development in Xiang An business district of Xiamen,” he said.

The counter closed at RM1.99 yesterday, up one sen, with 1.033 million shares changing hands.