IOI Properties’ 4Q net profit more than quintuples on revaluation gain; to focus on trimming inventory

• The IOI Central Boulevard Towers in Singapore added RM1.31 billion in value while its property investment assets in Malaysia gained RM645.5 million. The company, however, wrote down RM338.4 million.

KUALA LUMPUR (Aug 28): IOI Properties Group Bhd (KL:IOIPG) said on Wednesday its net profit jumped more than five times in the fourth quarter from a year earlier thanks largely to a revaluation gain.

Net profit for the three months ended June 30, 2024 (4QFY2024) was RM1.55 billion, compared to RM235.37 million over the same period a year earlier, IOI said in an exchange filing. The company booked a fair value gain of investment properties totalling some RM1.9 billion.

The IOI Central Boulevard Towers in Singapore added RM1.31 billion in value while its property investment assets in Malaysia gained RM645.5 million. The company, however, wrote down RM338.4 million.

Revenue for the quarter, meanwhile, rose 17.4% year-on-year to RM782.61 million from RM666.46 million, helped by improved performance across all segments.

“Moving forward, we will continue to focus on further reducing completed inventories through strategic product positioning and promotional sales campaigns,” said chief executive officer Lee Yeow Seng. The company sold RM583.6 million worth of completed inventories for the entire FY2024.

Meanwhile, the outlook in China remains challenging as the company wrote down RM227.8 million worth of inventories associated with its IOI Palm International Parkhouse amid intense pricing competition in Xiang An.

Nevertheless, the newly completed IOI Business Park Xiamen has achieved 100% occupancy rate while construction of the upcoming 370-room Sheraton Grand Xiamen is slated for completion by 2QFY2025, which would drive footfall and business activities, complementing IOI Mall Xiamen, it said.

As for Singapore, IOI Properties said it will continue to focus on increasing the occupancy rate of IOI Central Boulevard Towers while preparing for the launch of Marina View Residences and a luxury five-star hotel.

While the global operating environment continues to present challenges, “we remain committed to enhancing our offerings across three countries, expanding property investment portfolio to ensure stable recurring income, and leveraging on our hospitality-and-leisure segment,” said Lee.

In terms of segment, the property development division posted a 1% increase in revenue to RM499.9 million while segment profit rose 29% to RM133.5 million, attributed to higher sales in Malaysia resulting from the clearance of unsold stocks.

Its property investment segment reported a 65% surge in revenue to RM195.9 million while profit nearly doubled to RM91.6 million, thanks to positive leasing progress of IOI City Mall Phase 2 and leasing contribution from IOI Central Boulevard Towers.

The newly acquired W Kuala Lumpur and the opening of Moxy Hotel helped the hospitality and leisure segment’s revenue soar 68% to RM83.2 million, though segmental loss jumped to RM107 million due to write offs on hotel assets totalling RM96.7 million and higher depreciation.

For the full financial year of 2024 (FY2024), IOI Properties posted a 48% increase in net profit to RM2.06 billion from RM1.369 billion in FY2023, while revenue rose 13.4% to RM2.94 billion from RM2.59 billion.

Local sales contributed about 90% of the RM2.14 billion property sales achieved in FY2024, with a split of 44.4% in the Klang Valley region and 39.6% in the Johor region. Overseas projects in China made up about 9% while the remaining 1% was from Singapore.

IOI Properties also declared a dividend per share of five sen, the same as last year, payable Nov 1.

Shares of IOI Properties closed down two sen or 1% to RM1.96, giving it a market capitalisation of RM10.79 billion. Year to date, the stock is up 12%.

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