GuocoLand suffers eighth consecutive loss-making quarter

KUALA LUMPUR (May 18): GuocoLand (Malaysia) Bhd’s net loss widened to RM10.13 million for the third quarter ended March 31, 2020 (Q3FY20), from RM6.96 million a year earlier, on higher expenses.

This marks the property developer’s eighth consecutive loss-making quarter.

Quarterly revenue, however, rose slightly by 3.05% to RM98.06 million, from RM95.16 million in 3QFY19, on higher progressive revenue earned from its on-going Emerald Hills project.

In a filing to the exchange yesterday, GuocoLand attributed the losses to higher selling and marketing expenses, administration expenses, as well as finance costs.

The selling and marketing expenses grew by 50.49% to RM3.54 million, from RM2.36 million a year ago, mainly due to more sales and marketing activities on its on-going projects, the group said.

The administrative expenses, meanwhile, increased by 11.69% to RM21.6 million, from RM19.33 million previously, due to a one-off land contribution payment and increased staff expenses.

As a result of higher loan drawdown to finance its ongoing projects, the group also incurred higher finance costs of 8.91% to RM11.84 million, from RM10.87 million last year.

“The group’s business operations have been impacted by the implementation of Movement Control Order by the Malaysian government in mid-March 2020, where it has inevitably disrupted its operations in the property development, property investment and hotel segment,” GuocoLand said.

For the cumulative nine months ended March 31, 2020, the group said its net loss grew to RM34.98 million, from RM20.83 million last year, while revenue slipped 16.51% to RM236.57 million from RM283.34 million.

The wider losses in the nine-month period was attributed to administrative expenses due to the one-off land contribution payment and increase in staff expenses, as well as the share of loss of RM2.4 million in an associate company, arising mainly from additional tax and tax penalty imposed by the Inland Revenue Board.

On prospects, GuocoLand said the domestic property market is expected to be greatly affected by the Covid-19 pandemic and ensuing economic challenges.

As such, the its performance is expected to remain lacklustre in the short to medium term, the group said.

“The overall momentum and prospects of the group’s property development segment is therefore expected to remain challenging,” said the property developer,” it said.

Nevertheless, the group will continue to focus on monetising its inventories, and timely completion of its development projects, the group said, adding new product launches will be phased according to prevailing market sentiments.

Shares of GuocoLand closed unchanged yesterday at 57.5 sen, valuing the group at RM402.76 million. The counter grew some 51.32%, after it last fell to 38 sen on March 19. Over the past one year, however, the counter is down 19.58%.

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