Tropicana Outperformed FY2021 Property Sales Target

In a filing to Bursa Malaysia, property developer  Tropicana Corporation Bhd announced its unaudited financial results for the fourth quarter ended 31 December 2021 (Q4 FY2021). Despite posting higher property sales of RM1.3 billion, an impressive jump of 62.4% for the financial year ended 31  December 2021 (31 December 2020: RM802.4 million), the Group recorded revenue of  RM869.7 million, which was RM192.9 million lower when compared to the preceding year. Higher revenue in the preceding year reflected the completion of the disposals of four parcels of freehold development lands in Johor Bahru, for a total cash consideration of RM399.2 million whereby there were no land disposals in the current year. Excluding these said land disposals, the revenue in the current year would have been higher by RM206.3 million which was contributed by higher property sales and progress billings across ongoing key projects in the Klang Valley and Southern Region.  

The Group’s overall Q4 FY2021 revenue slipped 26.8% to RM263.8 million (Q4 FY2020: RM360.2  million) which was RM96.4 million lower when compared to the corresponding quarter in the preceding year. The Group’s profit before tax (“PBT”) was lower by RM102.9 million or 83.5% as compared to the corresponding quarter in the preceding year. This was mainly attributed to the completion of the disposals of two parcels of freehold development lands in Johor Bahru, for a total consideration of RM157.4 million whereby comparatively in Q4 FY2021 there were no land disposals in the current quarter.  

Dion Tan, Group Managing Director of Tropicana cited that the surge of property sales in 2021 is marked by pent-up demand post-lock down and gradual economic recovery. 

“The market is slowly bouncing back, and we saw a higher pick-up in property sales transactions before the end of HOC. Our property investment, recreation, and resort operations have slowly regained their pace as well. Our property sales continue to soar, all thanks to our team’s amazing commitment and support. We will continue the good momentum, accelerate our launches, and roll out more innovative marketing and sales campaigns to drive more sales. Digitalisation and online engagement became a  big part of our marketing strategies, as these efforts have borne fruit.” 

“We also hope the government will introduce more innovative homeownership packages to spur the market.” he summarised.  

For the financial year ended 31 December 2021, the Group recorded a loss before tax of  RM35.2 million, which was RM273.6 million lower when compared to the preceding year, which had gains arising from the sale of the four parcels of development lands amounting to RM236.0 million whereby there were no sales of land in the current year to date. Despite the loss for the year, the  Group’s property development and property management division still performed strongly with profits of RM77.0 million for the period which was 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. Therefore, the  Group will continue to focus on being market-driven in its product offerings whilst continuing to unlock the value of its land bank, at strategic locations across the Klang Valley, Genting Highlands, and  Southern Regions.  

Tropicana will also continue to focus on the introduction of new phases across its signature and established developments, namely Tropicana Heights, Tropicana Aman, Tropicana Metropark, as well as Tropicana Uplands, Tropicana Alma, and the first Tropicana Industrial Park in Johor. New developments in Genting Highlands and Langkawi are expected to anchor and provide a major impetus to the Group’s future growth, marked by the recent launch of Tropicana Journey Collection that showcases Tropicana Grandhill homes-by-the-hill and Tropicana Cenang homes-by-the-sea development.

For the period under review, Tropicana’s unbilled sales were up by 36% to RM1.5 billion (Q4 FY2020:  RM1.1 billion), backed by its unique residential, commercial and resort-themed developments. Overall,  Tropicana’s total landbank stood at 2,452 acres, with a total potential GDV of approximately RM152.2 billion, placing the Group in a good position to unlock the value of its strategic land bank and deliver sustainable earnings in the next few years.  

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