Digital Edge Daily - 14 August 2015 - Tropicana's unbilled sales hit record high of RM3b

14 August 2015

Tropicana Corp Bhd saw its net profit for the second quarter ended lime 30,2015 (2QFY15) fall 74% year-on-year to RM23.2 million from RM89.5 million, mainly because 2QFY14 had recognised gains from the disposal of properties and a joint-venture unit. Thus, earnings per share dropped to 1.6 sen a share from 6,45 sen a share previously, its filing to Bursa Malaysia yesterday showed.

Revenue for the quarter, however, improved 3.6% to RM312.3 million from RM30L5 million last year, underpinned by higher revenue recognition across key projects and proceeds from land sales. For the six months ended June 30,2015 (6MFY15), the property developer's net profit halved to RM42.4 million or 2.97 sen a share from RM97.3 million or 7,52 sen a share previously, for the same reason that caused it to record a fall in its latest quarterly revenue. Revenue for the period rose 26.9% to RM703.3 million versus RM554.2 million in 6MFY14.

In statement, Tropicana said despite cautious industry sentiments, its performance proved resilient. It also recorded "overwhelming success" in its maiden property launch in Tropicana Aman, Shah Alam, with a gross development value of RM342 million, with all 432 units of two- and three-storey link Arahsia Residences homes snapped up. The take-up rate at the second phase of its Bayan Residences development ?comprising 372 units of two- and three-storey link homes priced from RM850,000 onwards ?has also been encouraging.

As at June 30, Tropicana's total sales stood at RM787.4 million, in addition to having secured unbilled sales at a record high of RM3 billion, which it believes places it in a position to deliver sustainable performance in the near future, Tropicana said it is confident of achieving a total sales figure for FY15 that is comparable with the previous financial year's RM1.5 billion, despite the property market slowdown. While prospects in 2015 are expected to remain challenging, the group believes there will still be demand for landed properties and integrated developments in good locations, with great accessibility and attractive pricing. "Hie group will focus on projects in the central region for 2015, where the markets are more resilient," it added. Shares in Tropicana (fundamental: 1.3; valuation: 2.1) closed unchanged at 92 sen yesterday, for a market capitalisation of RM 1.33 billion..