IOI Properties Group records a 30% rise in net profit for FY2021
Putrajaya, 27 August 2021– IOI Properties Group Berhad (IOIPG) registered robust growth in revenue and net profit for the full financial year 2021 (FY2021) despite a general downbeat business sentiment weighed down by a prolonged COVID-19 pandemic.
IOIPG’s net profit rose 30% to RM663.3 million in FY2021 compared to FY2020. Its revenue improved 18% to RM2.5 billion for FY2021 compared to the preceding year corresponding period mainly due to better sales performance from its operations in Malaysia, which was driven by its dynamic sales and marketing campaign.
IOIPG Chief Executive Officer Dato’ Voon Tin Yow said the Group’s performance for FY2021 was commendable. This was attributable to the commitment and passion of Team IOI in consistently delivering products and services that exceeded expectations. For FY2021, IOIPG achieved sales of RM2.3 billion surpassing its sales target of RM2 billion.
“We are living in extraordinary times. While the Group encounters challenges throughout FY2021, we continue to soldier on to deliver by performing our best, prioritising our customers and demanding quality excellence in everything we do. That’s how we will achieve our Vision of being Trusted.,” he said.
Although the operating environment is expected to remain uncertain with the prolonged pandemic for the remainder of 2021, Dato’ Voon added that the Group is optimistic the rollout of the National COVID-19 Immunisation Programme and the recent successful Surge Capacity Vaccination to increase the rate of vaccination by the government of Malaysia will lead to the opening of more economic sectors, contributing to improved consumer sentiments and spur an economic recovery.
For the fourth quarter ended 30 June 2021 (Q4 FY2021), IOIPG’s net profit surged almost three- fold to RM119.4 million compared with preceding year corresponding quarter. Its revenue for Q4 FY2021 increased 8% to RM658.6 million from the preceding year corresponding quarter.
Revenue from the property development segment in Q4 FY2021 was RM579.8 million or 6% higher than the preceding year corresponding quarter. The higher revenue was mainly attributed to the Group’s operations in Malaysia which increased by 238% from RM124.4 million to RM420.8 million. However, this was partly offset by lower contribution from its operations in China due to lower sales achieved in Q4 FY2021.
For property investment segment, revenue and operating profit increased 6% and 3% to RM57.5 million and RM18.3 million respectively in Q4 FY2021, mainly due to higher rental relief assistance to tenants in the preceding year corresponding quarter arising from the pandemic.
For Q4 FY2021, the hospitality and leisure segment recorded better financial performance mainly due to the hospitality sub-segment. Revenue improved 93% to RM18.9 million and operating loss decreased 43% to RM11.3 million compared with the preceding year corresponding quarter.
IOIPG will leverage on the ongoing Home Ownership Campaign, its digital marketing capabilities and aggressive sales campaigns to drive sales with a focus on its well sought-after, mid-priced range of products.
In China, the construction of residential developments in IOI Palm City in Xiamen has been completed in Q4 FY2021 and this development will continue to contribute to the Group’s financial performance in the next financial year. Meanwhile, IOI Palm City Mall is expected to commence business in the third quarter of 2021, having secured high levels of occupancy.
To counter the recent resurgence of COVID-19 cases in Singapore, the government has introduced stricter measures, which, to some extent, have affected the construction progress of IOI Central Boulevard Towers. However, IOIPG anticipates its construction progress to recover swiftly as the government continues to confidently manage the pandemic with a high rate of vaccination amongst its population. Meanwhile, leasing activities for IOI Central Boulevard Towers has commenced.
For the retail segment in Malaysia, IOIPG will continue to support its tenants via digital marketing and innovative solutions as well as rental relief assistance amounting to approximately RM71 million as at 30 June 2021. The Group will also continue to adopt active and pragmatic tenant retention strategies to maintain occupancy rates.
IOIPG anticipates a longer recovery time for the hospitality and leisure segment due to the COVID-19 pandemic and the prolonged travel restrictions. Nevertheless, in preparation for medium to long-term recoveries, IOIPG has signed agreements with Marriott International to convert Putrajaya Marriott Hotel’s existing franchise management to a managed contract under the Premium brand, and the Palm Garden Hotel to the management of Marriott International under the Tribute Portfolio brand.
The Group expects the business environment to remain challenging as countries face resurgence of COVID-19 infections globally. Nevertheless, the Group will continue with its prudent and professional management to manage its operations to deliver satisfactory performance in the coming financial year.