Tropicana slips into the red in 2Q but property sales surge 970%

KUALA LUMPUR (Sept 28): Tropicana Corp Bhd sank into the red in the second quarter ended June 30, 2021 (2QFY21) with a net loss of RM25.04 million, versus a net profit of RM24.29 million a year ago, on lower revenue due to the impact of the lockdown.

The property developer said the net profit previously was helped by the recognition of gains arising from the sale of a freehold development land in Johor Bahru for RM241.8 million.

In its filing with Bursa Malaysia, Tropicana said its performances in property investment, recreation and resort operations were negatively impacted due to the enforcement of various phases of the Movement Control Order (MCO).

Quarterly revenue dropped 41.91% to RM194.98 million from RM335.67 million in 2QFY20, due to lower progress billings across some of the group's key ongoing projects in the Klang Valley and southern region as a result of the MCO.

Despite lower revenue, Tropicana's property development and management division still performed strongly and profitably, backed by strong sales and cost savings from projects, the group said.

The property development and management division performed strongly and recorded sales of RM349.6 million, an impressive jump of 970.3% from RM32.7 million in 2QFY20.

On a quarter-on-quarter basis, Tropicana also slipped into the red from a net profit of RM2.34 million in 1QFY21, while revenue plunged 18.94% from RM240.53 million.

For the first half of the year, the group posted a net loss of RM22.7 million versus a net profit of RM29.45 million in last year's January-June period, as revenue decreased to RM435.51 million from RM478.39 million.

Looking ahead, Tropicana said there will still be demand for properties in prime locations in established, matured, and developing townships, with attractive pricing and innovative ownership packages and offerings although the industry remains challenging in the short term.

"Therefore, the group will continue to focus on being market-driven in its product offerings whilst continuing to unlock the value of its land bank, at strategic locations across the Klang Valley, Genting Highlands, and southern region.

"Tropicana will also continue to focus on the introduction of new phases across its signature and established developments, namely at Tropicana Heights, Tropicana Aman, Tropicana Metropark, as well as Tropicana Uplands and Tropicana Alma in Johor," said the group.

For the quarter under review, Tropicana's unbilled sales were up by 84.6% to RM1.3 billion, from RM679 million in 2QFY20, backed by its unique residential, commercial and resort-themed developments.

Tropicana said its total land bank stood at 2,144 acres, with a total potential gross development value of RM77 billion, placing the group in a good position to unlock the value of its strategic land bank and deliver sustainable earnings in the next few years.

Tropicana's share price closed 1.92% or two sen lower at RM1.02, giving the group a market capitalisation of RM1.51 billion. The counter has climbed 18.6% year-to-date.

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