Tropicana says 4Q net profit down 83% on absence of land disposals, closes FY21 in the red

KUALA LUMPUR (Feb 28): Property developer Tropicana Corp Bhd saw its net profit for the fourth quarter ended Dec 31, 2021 (4QFY21) drop by 83.2% to RM7.94 million, from RM47.35 million a year ago, mainly due to the absence of land disposals in the quarter under review.

In 4QFY20, the group benefited from the disposal of two parcels of land in Johor Baru for a combined RM157.4 million.

As a result, earnings per share for 4QFY21 came in lower at 0.55 sen compared with 3.3 sen for 4QFY20.

Quarterly revenue also fell 26.8% to RM263.76 million from RM360.2 million the year before.

On a quarterly basis, however, Tropicana returned to the black from a net loss of RM37.41 million for 3QFY21 on the back of a strong financial performance of the property development and property management division, coupled with strong sales and cost savings from projects.

Revenue for the quarter increased 54.74% from RM170.46 million for 3QFY21 on higher progress billings and sales across some of the group’s key ongoing projects.

In 4QFY21, Tropicana’s unbilled sales were up 36% year-on-year to RM1.5 billion, backed by its residential, commercial and resort-themed developments. Total land bank stood at 2,452 acres, with a potential gross development value of RM152.2 billion.

For FY21, Tropicana slipped into the red, posting a net loss of RM52.17 million compared to a net profit of RM91.31 million for the previous year.

Revenue for FY21 fell 18.2% to RM869.72 million from RM1.06 billion for FY20, following the completion of the disposal of four parcels of land in Johor Baru for a total of RM399.2
million.

"Excluding the said land disposals, revenue for the current year would have been higher by RM206.3 million, which was contributed by higher property sales and progress billings across ongoing key projects in the Klang Valley and the southern region," the company said in a bourse filing on Friday (Feb 25).

Tropicana said in the medium term, its new developments in Genting Highlands, Pahang and Langkawi, Kedah are expected to anchor and provide a major impetus to the group’s future growth.

"Despite the prevailing challenges, the group is optimistic about medium- to long-term prospects for the property market and intends to, among others, maintain its active pursuit of opportunities to unlock the value of its strategic land bank across the Klang Valley, Genting Highlands and Johor in order to deliver sustainable returns to our shareholders," it added.

In a separate statement, Tropicana group managing director Dion Tan said the property market is slowly bouncing back, noting that the group saw a pickup in property sales transactions before the end of the Home Ownership Campaign.

“Our property investment, recreation and resort operations have slowly regained their pace as well. Our property sales continued to soar, all thanks to our team’s commitment and support. We will continue the good momentum, accelerate our launches and roll out more initiative marketing and sales campaigns to drive more sales,” he added.

Tropicana shares closed up one sen or 0.97% at RM1.04 on Friday, giving the group a market capitalisation of RM1.61 billion.

Edited by Kang Siew Li

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