IOI Properties Group Berhad (IOIPG) recorded a strong financial performance for its third quarter ended 31 March 2021 (Q3 FY2021) with a net profit of RM178.9 million, which more than doubled from RM83.6 million in the preceding year corresponding quarter.
Its revenue and operating profit also showed significant improvement, mainly attributed to higher contribution from the property development segment. IOIPG’s operating profit soared 72% to RM208.1 million with revenue expanding 44% to RM579.0 million in Q3 FY2021 compared with the preceding year corresponding quarter.
“Despite the ongoing COVID-19 pandemic, the Group achieved exceptional performance in Q3 FY2021. The overall business sentiment was subdued with the Movement Control Order (MCO) 2.0 imposed in mid-January 2021. However, every member of Team IOI pushed forward and focused on achieving targets and we defied the odds. All these are possible through the commitment and passion of Team IOI to consistently deliver products and services that exceed expectations,” said IOIPG Chief Executive Officer Dato’ Voon Tin Yow.
For the property development segment in Malaysia, IOIPG’s effective and unique sales and marketing campaign, which was designed to assist buyers to overcome the challenges of homeownership and realise life-long dreams, received favourable response. This has led to strong sales performance in Q3 FY2021, with profits to be registered in coming quarters.
He added that IOIPG would carry on with its dynamic marketing initiative while leveraging on the Home Ownership Campaign to boost sales of well sought-after, mid-priced range products. These high-quality products are built within integrated developments offering various amenities in flourishing areas such as the Klang Valley (16 Sierra, Bandar Puteri Bangi, IOI Resort City, Warisan Puteri Sepang, Bandar Puteri Puchong and Bandar Puchong Jaya) and Johor (Taman Kempas Utama and Bandar Putra Kulai) that are easily accessible and well-connected.
Contributions from the property development segment were RM485.2 million in revenue and RM182.3 million in operating profit in Q3 FY2021, which soared by 71% and 113% respectively from the preceding year corresponding quarter. The sterling performance was mostly due to higher sales contribution from operations in Malaysia and China, as well as advance progress work from on-going residential development in China.
The residential developments in IOI Palm City, Xiamen, China will continue to contribute to the Group’s financial performance in the coming quarters. Meanwhile, IOI Palm City Mall, Xiamen has secured high occupancy level with business expected to commence by the third quarter of 2021.
The pace of construction progress of Central Boulevard Towers in Singapore has gained speed. However, looking ahead, the Group expects further uncertainties due to the measures taken by the government of Singapore to contain the recent wave of the COVID-19 pandemic. Leasing activities have commenced and IOIPG has seen a strong response from the market.
For the property investment segment, it contributed RM72.4 million in revenue and RM32.9 million in operating profit in Q3 FY2021, which were RM8.5 million and RM7.2 million lower respectively against the preceding year corresponding quarter. Meanwhile, the hospitality and leisure segment recorded a decrease in revenue from RM35.4 million to RM19.1 million and operating loss increased from RM5.0 million to RM7.5 million in Q3 FY2021.
The recovery of the property investment, and hospitality and leisure segments in Malaysia were dampened when MCO 2.0 was imposed; and it is expected to be further impacted by the ongoing MCO 3.0, which commenced on 12 May 2021. Nonetheless, the property investment segment will continue to implement strategies in tenant retention. As at 31 March 2021, the Group has supported its tenants with rental relief worth over RM55 million. To maintain its market share in retail, IOIPG will also leverage on its customer loyalty programme and adopt digital innovation to enhance customer experience.
Although the business environment remained challenging due to the pandemic, IOIPG’s performance in the current year-to-date improved significantly. The Group’s revenue and operating profit rose by about one-fifth to RM1.8 billion and RM719.3 million respectively in the current year-to-date of FY2021 compared with the preceding year corresponding period. The increase in revenue was mainly due to higher contribution from operations in the Klang Valley and Xiamen, China.
With the prolonged pandemic and persistent geopolitical tensions, the operating environment is expected to remain challenging and uncertain. However, the Group will always manage its operations prudently and professionally to ensure satisfactory performance in the coming quarters and at the same time, consolidate its market position and strengthen its competitive edge to capture any opportunities that may arise when the situation gradually improves.