Selangor Properties' 4Q profit plunges 88% to RM57.4m

KUALA LUMPUR (Dec 28): Selangor Properties Bhd’s net profit for the fourth quarter ended Oct 31, 2016 (4QFY2016) plunged 88.1% to RM57.40 million or 16.70 sen per share, from RM483.82 million or RM1.41 per share a year earlier.
 
In a filing to Bursa Malaysia, the group said this was due to lower profit from its property investment division, higher losses from its property development segment due to marketing, corporate and administrative costs, in addition to zero sales of Aira Residence units, as well as foreign exchange loss of RM15.8 million as the ringgit strengthened against the US dollar.
 
Revenue, meanwhile, rose 28.6% to RM35.35 million, from RM27.48 million in 4QFY2015. Higher topline contributions were contributed by the property investment and investment holding divisions, driven by higher occupancy and higher dividend income from overseas investments respectively, as well as its Australian operations.
 
For FY2016 as a whole, Selangor Properties’ net profit tumbled 88.7% to RM67.36 million, from RM593.68 million in FY2015. Revenue rose 22.4% to RM121.82 million, from RM99.49 million.
 
The group did not recommend any dividend.
 
Going forward, Selangor Properties expects operations in Malaysia and Australia to remain positive in 2017. However, in view of its overseas investments, fluctuations in foreign currency exchange will affect the group’s profitability, it said.
 
“The property investment is expected to remain stable and will continue to contribute positively to the group. The investment properties in Menara Milenium in Damansara Heights and Claremont Shopping Centre in Perth, Australia, continue to enjoy high occupancy rates,” it said.
 
The group launched the Aira Residence project in October, and expects sales to contribute positively to the current financial year's results. It also intends to re-launch the Bukit Permata project in mid-2017, subject to market conditions.
 
“The proposed development of the group's land bank in Damansara Heights is in its initial planning stage, with considerations on designs which will provide integration and connectivity with the surrounding Mass Rapid Transit project,” it added.
 
In a separate filing to the bourse, Selangor Properties said it has undertaken a revaluation exercise on all its investment properties to comply with the accounting standards under the Malaysian Financial Reporting Standards (MFRS) 140 on Investment Property.
 
Following the revaluation exercise, there is a revaluation surplus for an aggregate amount of RM20.74 million, which will result in an increase of six sen in the net asset per share of the group.
 
The valuation on the asset was conducted by VPC Alliance (KL) Sdn Bhd, as at Oct 31, 2016. The total value placed on the asset by the valuer is RM637.55 million.
 
Selangor Properties’ shares rose 0.9% today to RM4.55, valuing the group at RM1.55 billion. — theedgemarkets.com