IGB 3Q net profit surges 91% on higher contribution from property development, investments

KUALA LUMPUR (Nov 14): IGB Bhd's third quarter net profit surged 90.91% to RM68.29 million, from RM35.77 million a year ago, due to higher contribution from the group's property development and investments in both retail and commercial properties.

Earnings per share for the quarter ended Sept 30, 2018 rose 75.17% to 10.3 sen from 5.88 sen previously, IGB said in a stock exchange filing today.

Revenue for the period climbed 23.54% to RM353.22 million, from RM285.92 million a year earlier, on higher sales in the property development, retail property investment and investment divisions, it added.

The group's retail property investment division saw IGB REIT, the owner of Mid Valley Megamall and The Gardens mall, record higher gross revenue and net property income during the quarter.

Meanwhile, its commercial property investment building recorded over 80% in average rental rates, which is comparable to the previous year.

The group's property development division recorded significantly higher revenue due to a higher percentage of completion for its Stonor 3 development project, which is about 55% completed.

IGB said that for the nine months ended Sept 30, 2018, the group saw a 12.17% increase in revenue to RM940.91 million, from RM838.86 million a year ago.

Net profit, however, declined 7.49% to RM143.64 million from RM155.26 million over the same period as the previous year's results had included a one-off gain.

Going forward, IGB said the property development and property investment segments are expected to be more challenging in the near term due to the scheduled increase in supply of new retail space and slower demand for office space in Kuala Lumpur.

"However, with the prime location of the group's retail malls and office buildings, the board expects contribution from this segment to be satisfactory," it added.

IGB said the recent completion of the Mid Valley Southpoint offices is expected to contribute positively to the group.

Shares in IGB closed up one sen or 0.38% at RM2.61 today, leaving the group with a RM1.8 billion market capitalisation. — theedgemarkets.com

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