IOI Properties Group Berhad (IOIPG) reported a 13 percent increase in revenue to RM1.3 billion while operating profit was 7 percent higher to RM511.2 million in the first six months of financial year 2021 (FY2021) compared to the preceding year corresponding period, despite the challenging business environment due to the pandemic. For the period ended Dec 31, 2020, the Group recorded a total sales value of RM916.4 million.
“We expect that the measures announced in Budget 2021 and Home Ownership Campaign will continue to stimulate the property market in Malaysia, boosting demand for mid-priced range products that are highly sought after in our integrated developments located in high-growth areas, complemented by amenities and easily accessible with excellent connectivity,” said IOIPG Chief Executive Officer Dato’ Voon Tin Yow.
With the Overnight Policy Rate (OPR) at a historical low of 1.75 percent during the period under review, Voon said this had bode well for the growth of the property market as it offers opportunities for property purchasers to secure bank loans with attractive interest rates. This would continue to generate buying interest, benefitting the Group as it offers a range of high-quality products in strategic locations.
For the second quarter ended Dec 31 (Q2 FY2021), IOIPG registered a net profit of RM172.3 million. Revenue for the Group was RM591.3 million, an increase of 5 percent from RM564.1 million in the preceding year corresponding quarter which was mainly attributable to the property development segment.
The property development segment contributed RM494.9 million in revenue and RM192.6 million in operating profit in Q2 FY2021, jumping 20 percent and 19 percent respectively from the preceding year corresponding quarter. This was mainly driven by higher than expected sales contribution from operations in China. Revenue and operating profit for the property investment segment were at RM73.6 million and RM31.3 million respectively while the hospitality and leisure segment recorded a revenue of RM21.1 million.
The Group’s hospitality and leisure segment will maintain its aggressive marketing and promotion packages, whilst implementing cost optimisation strategies by progressively right-sizing the workforce in preparation for medium and long-term recoveries.
Meanwhile, the property investment segment comprising retail and office will continue to adopt active and pragmatic tenant retention strategies to maintain occupancy rates; as well as to improve tenant mix in positioning its malls as retail destinations of choice. “The Group supported its tenants with rental relief valued at more than RM45.3 million from March to December 2020,” added Voon.
In Singapore, the construction of Central Boulevard office development has resumed since August 2020 after the imposition of the Circuit Breaker by the Singapore Government in April 2020.
In China, IOI Palm City Mall, which is expected to open by the third quarter of 2021, has secured high occupancy; and the construction of boutique office blocks and Sheraton Grand Hotel is progressing well.
Moving forward, IOIPG’s digital marketing capabilities complemented by aggressive sales and marketing strategies will continue to drive sales and facilitate property transaction processes in Malaysia to offer quality products and lifestyle driven by technology.