IOIProp confident of hitting FY23 target

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PETALING JAYA: IOI Properties Group Bhd (IOIProp), which saw its first quarter ended Sept 30 net profit more than triple due to a one-off fair value gain, says global challenges remain and is cautious on its outlook.

The group said in a statement that it remains cognizant of the global challenges as it looks ahead to navigate through substantial headwinds across its developments in Malaysia, Singapore and China – the three countries which it does business in.

IOIProp further said that it was confident recurring earnings from its various property investment portfolios as well as its pipeline of new projects and launches will continue to lay a strong foundation to ensure the sustainability of the group’s earnings across all business segments for the long term.

“The group has continued to deliver resilient results despite the challenges.

“I am confident that we are on the right track to achieve our targets in the financial year 2023 (FY23) as our business segments are well positioned for sustained growth,” said chief executive officer Datuk Voon Tin Yow.

In its first quarter ended Sept 30, IOIProp’s bottom line more than tripled to RM640.3mil from RM208.8mil in the same quarter a year ago.

Quarterly revenue also improved year-on-year by 60% to RM691.5mil from RM431.8mil.

Basic earnings per share rose to 11.63 sen for the quarter, while net tangible assets per share stood at RM3.87.

“The strong start is attributed to better performances across all business segments, particularly the hospitality and leisure segment which saw a sterling recovery of more than 400% in revenue,” IOIProp said.

It said profits had improved following a recognition of fair value gain of RM470.4mil from the completion of IOI City Mall Phase 2 and a strong turnaround in the hospitality and leisure, and property investment segments.

Its property development segment saw it achieving a revenue of RM529.9mil, which is a 46% increase compared to the preceding year’s corresponding quarter.

IOIProp noted this improved performance was attributable to higher sales contributions from the Malaysian operations despite various challenges facing the the property industry, including inflationary pressures and global supply chain disruptions.

Meanwhile, IOIProp’s property investment segment’s revenue rose to RM110.1mil, which it said was an improvement of 86% in performance compared to the preceding year’s corresponding quarter.

TA Research in its latest report believes that investors with a longer investment horizon should consider investing in IOIProp as it anticipates stronger earnings in FY25.

Earnings could likely be supported by contributions from Marina View development and rental income from new investment properties, including IOI Mall Xiamen, IOI City Mall Phase 2, and the Central Boulevard office tower, it said.

The research house has adjusted its target price (TP) for IOIProp downwards to RM1.16 from RM1.35, but maintained its “buy” recommendation on the stock.

Meanwhile, RHB Research said IOIProp’s first-quarter results had beat expectations, due to the opening of IOI City Mall Phase 2 as well as the strong recovery of its hospitality division.

“We remain upbeat on the company’s earnings growth prospects in FY23-FY24, given the stronger contributions from its property investment division as IOI Central Boulevard Towers commences operations late next year,” RHB Research said.

It also maintained a “buy” call on the stock with a TP of RM1.18.

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