Property developers have been painfully held back during the lockdown this year that lasted 4 months, not being able to complete projects and conduct sales has impacted some of the players drastically.
Tropicana Corporation Berhad on of the largest developer in the country with residential and commercial ventures posted a devastating dip in revenue to 41% for the second quarter, despite posting higher property sales of RM349.6 million, an impressive jump of 970.3%. Its revenue was RM195 million compared to same quarter last year at RM335.7 million which incidentally was RM140.7 million lower when compared to the corresponding quarter in the preceding year. According to its press submission, the slip mainly attributed to the weak performance of the group’s property investment, recreation, and resort operations due to the Covid-19 outbreaks and enforcement of the Full Movement Control Order (“FMCO”) by the Malaysian Government.
Dion Tan, Tropicana’s Group Managing Director shared the impact of FMCO and despite the unprecedented times, the Group’s property sales performed well. “Like all businesses, the pandemic and FMCO have caused disruption and delays in the rollout of our new projects as well as ongoing projects. The lockdown has also negatively impacted our property investment, recreation, and resort operations.”
Due to this, the Tropicana Corporation recorded a loss before tax of RM43.5 million as the performance of its properties and resort operations were negatively impacted due to the enforcement of the FMCO leading to disruptions in operations and resulting in a loss for the quarter for that particular segment. However, in the current period, the Group’s property development and property management division still performed strongly and profitably despite the enforcement of the FMCO.
For the financial period ended 30 June 2021, the Group recorded revenue of RM435.5 million, whereby the revenue in the current period was mainly contributed by higher sales and progress billings across key projects in the Klang Valley and Southern Region. The performance has picked up during the period as compared to the corresponding period in the preceding year which was affected by MCO. Loses was recorded at RM24.1 million and despite the loss for the period, the property development and property management division still performed strongly and made profits of RM55.6 million for the financial period which were backed by strong sales and cost savings from projects.
Although the industry remains challenging in the short term, the Group believes that there will still be demand for properties in prime locations in Tropicana’s established, matured, and developing townships, with attractive pricing and innovative ownership packages and offerings. The focus is to be market-driven in its product offerings and continuing to unlock the value of its land bank, at strategic locations across the Klang Valley, Genting Highlands, and
Tropicana will also continue to focus on the introduction of new phases across its signature and established developments, namely at Tropicana Heights, Tropicana Aman, Tropicana Metropark, as well as Tropicana Uplands and Tropicana Alma in Johor.
Overall, Tropicana’s total landbank stood at 2,144 acres, with a total potential GDV of approximately RM77 billion, placing it in a good position to unlock the value of its strategic landbank and deliver sustainable earnings in the next few years