Property developer Tropicana Corporation Berhad on 11 May announced its unaudited financial results for the first quarter ended 31 March 2015.
For the first quarter under review, the Group recorded revenue of RM390.9 million or 54.7% increase from RM252.7 million in the same period in 2014. The Group’s profit before tax (PBT) rose 137% to RM41.1 million, up from RM17.3 million a year ago, whilst net profit attributable to shareholders increased by 146.3% to RM19.3 million against RM7.8 million in 2014.
The above revenue and PBT figures relate to the Group’s continuing operations and exclude contributions from Tenaga Kimia Sdn Bhd, for which a share sale agreement was signed on 15 April 2015, and completion of the sale is expected in the first half of 2015.
Tropicana’s improved performance in the first quarter of FY2015 was driven by higher revenue recognition across key projects within the Klang Valley such as Tropicana Gardens in Kota Damansara, Tropicana Heights in Kajang and Tropicana Metropark in Subang Jaya, as well as Tropicana Danga Bay in the Iskandar Region in Johor, and gain from a land sale located in Klang Valley.
Tropicana achieved new sales of RM175.9million in the first three months to 31 March 2015. However, the Group is confident of achieving total sales comparable to previous financial year of RM1.5 billion in 2015 in view of the overwhelming interests and encouraging response to its recently launched landed properties in Tropicana Heights, Kajang, as well as the upcoming 2- and 3-storey landed properties in Tropicana Aman, Shah Alam from the second quarter onwards. Based on unbilled sales of RM2.6 billion as at 31 March 2015 and the targeted level of progress across ongoing projects, the Group is expected to deliver sustained financial performance in the current year.
The marketing strategy for 2015 will be to vary and adapt launches to suit market demand – incorporating higher component of landed properties. The Group will focus on projects in the Central Region and Northern Region for 2015, where the markets are more resilient.
The Group will continue to unlock value of its landbank in the Klang Valley, where potential Gross Development Value (GDV) is in excess of RM24.5 billion, as well as those in the Northern Region with potential GDV of RM9.5 billion. The Group possesses a sizeable landbank of close to 1,866 acres across Malaysia with future GDV of over RM50 billion.
As part of the Group’s on-going de-gearing initiatives, Tropicana is expected to raise a combine gross proceeds of RM734.7 million from the disposal of Tenaga Kimia Sdn Bhd (sold for RM194.7 million in April 2015), and Tropicana City Mall and Office Tower (sold for RM540 million in January 2015). Proceeds raised will be utilised for working capital and repayment of bank borrowings of the Group.
In addition, the Group has completed the sale of 308.72 acres Canal City land to Eco World Development Group Berhad for RM471 million on 31 March 2015, whilst the impending sale of 3.14 acres Bukit Bintang land to a joint-venture led by Agile Property Holdings Ltd for RM448 million is expected to complete in the third quarter of this year.
This will put Tropicana on a stronger financial footing while it continues to further strengthen its balance sheet via unlocking value of its landbank.