Guocoland's 2Q net profit falls 37% despite increased revenue

• Quarterly revenue rose 55.6% to RM119.61 million from RM76.9 million, primarily due to increased contributions from the property development division, driven by higher progressive profit recognition in North Tower of Emerald Hills and improved sales from the Oval project.

KUALA LUMPUR (Feb 6): Guocoland (Malaysia) Bhd reported a 36.64% decrease in net profit to RM5.67 million for the second quarter ended Dec 31, 2023 (2QFY2024), compared with RM8.95 million a year ago, despite higher revenue.

The decline in net profit was attributed to the better gross margin previously amid the finalisation of development costs of Garden Terrace and South Tower in the group's Emerald Hills project in Cheras, and increased construction costs due to material price hikes.

Earnings per share dropped to 0.79 sen from 1.27 sen for 2QFY2023, according to the property developer in a stock exchange filing.

Quarterly revenue rose 55.6% to RM119.61 million from RM76.9 million, primarily due to increased contributions from the property development division, driven by higher progressive profit recognition in North Tower of Emerald Hills and improved sales from the Oval project.

For the six-month period, Guocoland's net profit eased 0.2% to RM10.08 million from RM10.10 million for the same period of FY2023, although revenue was up 29.9% to RM238.76 million from RM183.7 million.

Looking ahead, the group acknowledged persistent challenges in the domestic property sector, due to elevated interest rates and rising construction costs, leading to a compressed profit margin. Additionally, the group highlighted ongoing challenges for property sales due to oversupply in different markets and segments.

Nevertheless, the group emphasised its key focus on the timely completion of ongoing development projects and the monetisation of its inventories.

It added that new product launches will be phased in accordance with prevailing market conditions.

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