IOI Properties Group Bhd group chief executive officer Lee Yeow Seng.
PETALING JAYA: IOI Properties Group Bhd
began its financial year of 2025 on a weak footing after first-quarter earnings shrunk due to increased interest expense and a lower revenue from its property development business.
IOI Properties told the bourse that its net profit slumped by 60.3% year-on-year (y-o-y) to RM69.17mil in the first quarter ended Sept 30, 2024, translating to an earnings per share of 1.26 sen.
The completion of IOI Central Boulevard Towers in April 2024 led to a higher interest expense, which in turn reduced the group’s net profit.
In addition, the property development segment saw a 21% decline in revenue, mainly due to lower contribution from Malaysia and slower sales in China.
However, the weaker performance was offset by the strong performance of the property investment segment, alongside the hospitality and leisure segment.
The property investment segment saw a 52% y-o-y growth in revenue, thanks to the recurring lease income derived from IOI Central Boulevard Towers in Singapore and record performance contribution from IOI City Mall.
Meanwhile, the hospitality and leisure segment’s topline surged 127% y-o-y, driven by contributions from three new additions to the portfolio, namely Moxy Hotel, W Kuala Lumpur and Courtyard by Marriott Penang.
It was further lifted by higher contributions from Palm Garden Hotel, A Tribute Portfolio Hotel, and Putrajaya Marriott Hotel following the completion of its refurbishment works.
Overall, the first-quarter revenue rose by 6.1% y-o-y to RM687.85mil.
The group did not declare a dividend for the quarter.
IOI Properties group chief executive officer Lee Yeow Seng said the group’s operating environment, both domestic and internationally, will continue to face headwinds.
However, the declining interest rates outlook bodes well for the group.
“Our diversified product offerings across three countries, sizable recurring income stream from our established property investment portfolio and the positive outlook of the hospitality and leisure segment will provide a solid foundation for sustained earnings ahead.
“We will continue to monitor the market and strategically time our launches to achieve a good take-up rate and sustain earnings.
“Additionally, our concerted efforts to clear completed inventories has yielded a further reduction of RM179.9mil, bringing the completed inventories down to RM1.74bil, which was partially due to foreign exchange adjustments of the completed inventories in China.
“This enables immediate monetisation into cashflow to support the group’s ongoing capital commitments and working capital requirements.
“We remain focused on reducing the completed inventories further through strategic product positioning and promotional sales campaigns,” he said in a statement.
In the first quarter ended Sept 30, 2024, the property development segment achieved sales of RM331.7mil, where local projects accounted for 97% of the total sales.
In Malaysia, sales were primarily driven by the Klang Valley region at RM217.6mil.
