KUALA LUMPUR, Aug 25 (Bernama) -- IOI Properties Group Berhad (“IOIPG”) achieved a revenue of RM715.9 million which is a 9% rise compared to the preceding year corresponding quarter in Q4 FY2022. The increase in revenue is underpinned by strong performances from the Group’s property investment and hospitality and leisure segments.
The Group’s property development segment recorded a revenue of RM561.1 million, a decrease by 3% compared to the preceding year corresponding quarter due to lower sales of properties in China. Notwithstanding the slower sales in China, its operating profit rose by 37% to RM228.1 million compared to the preceding year corresponding quarter. This is mainly attributable to higher profit contributions from IOI Palm City, China and higher sales of commercial properties in Malaysia.
In the property investment segment, the Group recorded a strong performance with an increase of 89% in revenue to RM51.3 million and a 109% rise in operating profit to RM19.9 million compared to the preceding year corresponding quarter. This is mainly attributed to the increase of footfall within the mall operations in Malaysia as a result of the resumption of all economic activities and higher retail spending in light of the attractive mall offerings during the quarter under the review. Apart from that, the commencement of recurring leasing income from the business commencement of IOI Mall, Xiamen, China in October 2021 has also contributed to the increase in the segment’s revenue and operating profit.
For the Hospitality and Leisure segment, revenue soared to RM42.4 million, an increase of 124% compared to the preceding year corresponding quarter. This strong performance is mainly attributed to the robust domestic demand that has returned with the withdrawal of travel restrictions, the reopening of international borders and the celebration of festive seasons during the quarter under review.
Nevertheless, IOIPG is cognisant of external headwinds such as inflationary pressures and global supply chain disruptions while remaining steadfast to capitalise on improving conditions of our nation’s economy throughout the financial year.
Meanwhile, Bank Negara Malaysia has announced an 8.9% growth of Malaysia’s gross domestic product which reflects the normalising of economic activities as a result of its transition to the endemic phase and the reopening of domestic and international borders.
“The transition towards endemicity continues to steer our nation towards a healthy recovery in all sectors of its economy. Hence, we are confident that this will bolster market and economic conditions which will augur well for all business segments across IOIPG,” said IOIPG CEO Dato’ Voon Tin Yow.
The Group’s property development segment recorded sales of RM1.9 billion in FY2022. Despite the Klang Valley region reporting a decrease of 8%, it was still responsible for 48% of total group sales achieved. Meanwhile, overall sales from Malaysia contributed towards 77% of the total group sales, which saw its highest percentage increase of 44% from the Johor region.
IOIPG acknowledges the macroeconomic and sectoral concerns brought on by rising inflation, supply chain disruptions and interest rate hikes. Nonetheless, the Group remains optimistic as it is well-positioned to endure these challenging times. In the next financial year, IOIPG will be focused on enhancing its value to further improve profitability. To achieve this, the Group will be launching products with higher margins corresponding to the maturity of its landbank and infrastructure of its integrated developments.
In the retail and hospitality segments, the withdrawal of movement restrictions continue to support a strong recovery in these segments. The opening of IOI City Mall Phase 2, which is scheduled in end August, will make IOI City Mall the largest mall in Malaysia with an increase of its net lettable area to 2.5 million sq ft. Additionally, the expansion will introduce more than 300 new retail outlets, bringing the total number of retail outlets to over 700. In light of the expansion, IOIPG anticipates stronger contributions from higher recurring lease income within this business segment. Meanwhile, the refurbishment of two hotels, Putrajaya Marriott Hotel and Palm Garden Hotel, Putrajaya ensures that the Group is well-poised to respond to any increase in international and domestic tourism.
On the international front, the property market in China has been impacted by curtailed economic activities and diminished consumer confidence as a result of resurging Covid-19 outbreaks and subsequent lockdowns combined with further escalation of the property sector crisis. In response, the Central Bank of China has announced a series of easing policies, in an effort to end the property downturn that has hampered growth in the second quarter. Meanwhile, the Group’s marketing campaign is anticipated to drive sales of its completed development in Xiamen, China. In response to the challenges arising from the strict lockdowns and movement control which has affected our mall operations in Xiamen, IOIPG has adopted a pragmatic tenant retention strategy to maintain occupancy rates and to support our tenants as business partners.
In Singapore, the Group has commenced its planning of a mixed development for its Marina Bay site. Meanwhile, the development of IOI Central Boulevard Towers is on track to be completed in the second half of 2023. It has secured an international anchor tenant, which is expected to promote a strong tenant mix for this development. Furthermore, this Grade A commercial development has dedicated over 120,000 sq ft to green landscaping with building design features that includes the harnessing of natural sunlight, double-glazed glass façade and well-designed acoustics among others which are aimed at reducing operational carbon footprint. This reflects the Group’s ESG aspirations to safeguard the environment, which is in line with our vision to be a Trusted. brand.
Moving forward, IOIPG remains vigilant in the face of persisting domestic and global challenges. In acknowledgement of these headwinds, the Group will forge ahead with a strong pipeline of projects along with channelling its focus towards selling completed units across its developments in Malaysia, Singapore and China. The Group will also leverage on its prudent and professional management capabilities to continue delivering satisfactory performance across all its business segments.
