Q4 FY19 revenue stood at RM365.0 million, while profit before tax (“PBT”) rose 107.9% to RM272.7 million, and net profit attributable to shareholders (“net profit”) surged 354.4% to
RM233.9 million
Property developer, Tropicana Corporation Berhad (Tropicana) announced its unaudited financial results for the fourth quarter ended 31 December 2019.
For the quarter under review (“Q4 FY19”), Tropicana recorded a revenue of RM365.0 million, decreasing 38.5% from the corresponding quarter in FY2018 attributed to lower progress billings across some of the Group’s key on-going projects and lower sales given the challenging property industry.
The disposal of a parcel of freehold development land for RM143.0 million in the corresponding quarter in the preceding year also contributed to higher revenue in that quarter.
The Group’s PBT rose 107.9% to RM272.7 million as compared to the RM131.2 million achieved in the same period a year ago. The spike in PBT was a result of the recognition from the negative goodwill which arose when Tropicana acquired development lands held by twelve acquiree companies from a related party at an average discount of 13.4% to the market value of these lands where the completion of this corporate exercise was in November 2019. Correspondingly, its net profit surged 354.4% to RM233.9 million in Q4 FY19 from RM51.5 million in Q4 FY18.
For the year under review, lower sales and progress billings across projects in the Klang Valley and the Southern region led to the decrease of 31.5% in Tropicana’s revenue, from RM1.1 billion compared to RM1.6 billion in the preceding year. Nonetheless, the Group’s PBT increased by 19.6% from RM320.2 million in 2018 to RM383.1 million in 2019 due to the recognition of the negative goodwillsubsequent to the completion of the corporate exercise in November 2019. Net profit jumped 97.5% to RM335.8 million in 2019 from RM170.0 million recorded in 2018.
While the Malaysian property market is expected to be challenging in the short term, the Group believes that the government will provide continued support towards home ownership, especially towards first-time home buyers.
This growth momentum is expected to sustain throughout 2020. Against this backdrop, the Group believes that there will still be demand for properties in prime locations with attractive pricing.
The Group has been focused on laying the groundwork to strengthen its foundations to see it through the next growth phase, including the current market environment.
In 2020, the Group plans to introduce new development and phases across its signature Tropicana townships amounting to a GDV surpassing RM2.0 billion.
A key highlight in 2020 will be the launch of the Group’s maiden development, Tropicana Grandhill. Situated 3,000 ft above sea level, this 112-acre township with a potential GDV between RM12.0 and RM15.0 billion will be the first township development in Genting Highlands.
Based on the master plan, this highland city is expected to usher a new trend of holistic and health-centric resort living lifestyle. The first phase of Tropicana Grandhill will be the TwinPines Serviced Suites with over 1,400 units of serviced apartments.
Other new upcoming launches include Shoppes & Residences (South), a mixed development comprising retail lots and serviced apartments at Tropicana Metropark, Subang Jaya; three upcoming landed residential phases at Tropicana Aman, Kota Kemuning; the sixth residential and commercial phase at Tropicana Heights, Kajang; Tropicana Miyu condominiums at Jalan Harapan, Petaling Jaya; as well as shop offices at Gelang Patah, Johor.
Coupled with the successful launch of Elemen Residences, the first phase of lakeside homes featuring modern, tropical-themed superlink homes at Tropicana Aman in Kota Kemuning; and Edelweiss SOFO & Serviced Residences, the final phase of Tropicana Gardens in Tropicana Indah at the end of 2019, all these developments and phases are expected to contribute positively to the Group’s earnings in 2020 and beyond.
With the completion of the corporate exercise in November 2019, the Group’s landbank increased to 1,754.1 acres with a total potential GDV of RM61.5 billion, along with the joint development agreements for 1,235 acres of land with a potential GDV of RM4.8 billion, which will further strengthen the Group’s project development offerings.
Looking ahead, the Group will continue to stay focused on being market driven in its product offerings while unlocking value of its landbank in strategic locations in the Klang Valley, Genting and the Southern region of Peninsular Malaysia.
