PETALING JAYA: IOI Properties Group Bhd (IOI Prop) is hoping the vaccine rollout would eventually help stabilise the economy locally noting that its sales in China where Covid-19 is well contained is doing better than expected.
“I think for Malaysia, the outlook is slightly better now since people are more hopeful with the vaccine being deployed.
“In our other markets such as China, the property market there is very hot again, ” IOI Prop chief operating officer Teh Chin Guan told StarBiz.
“In Singapore where infections are also well controlled, they have seen property transactions reaching a record high recently, ” he added.
Teh believed that the property price trend for Malaysia is now at or already, near the bottom.
“I understand that some developers are now selling some of their units at below cost since they need cashflow to sustain themselves so they would rather sell below cost.
“But I do not think this would be sustainable in the longer run. Hopefully things would improve moving forward with the vaccine, ” Teh said.
The property developer had at end-Feb reported its second quarter (ended Dec 31,2020) net profit of RM172.3mil, compared with RM215.1mil in the previous corresponding period.
Revenue for the second quarter was at RM591.3mil, which is an increase of 5% from RM564.1mil a year earlier.
A closer look at its results showed the property development segment’s operating profit grew by 19% from the previous year’s corresponding quarter while its other segments’ performance were affected by the movement control order (MCO).
This segment was buoyed by the higher than expected performance in China.
Meanwhile, the company said in notes to its financial statements that its property investment segment had been affected by the rental relief assistance that had been extended to tenants due to the re-imposition of CMCO then in mid-October.
While the hospitality and leisure segment had been impacted from the CMCO as well with an operating loss of RM7.7mil.
“Our hotel accommodation operations are struggling as since both interstate and international travel is now not open.
“Hotels is also used as a venue for convention and meetings and this is also a core part of running a hotel business, ” Teh said.
Teh said IOI Prop continues to be on the lookout for good landbank to add to its inventory but added that it is now more careful without stating its preference for any particular area.
IOI Prop’s shares last traded at RM1.34 on Friday.
Its latest financial results showed its net tangible assets were at RM3.46 per share.