In a filing to Bursa Malaysia, property developer Tropicana Corporation Berhad (“Tropicana” or “The Group”) announced its unaudited financial results for the second quarter ended 30 June 2021 (“Q2 FY2021”).
Despite posting higher property sales of RM349.6 million, an impressive jump of 970.3%, the Group’s overall Q2 FY2021 revenue slipped 41.9% to RM195 million (Q2 FY2020: RM335.7 million) which was RM140.7 million lower when compared to the corresponding quarter in the preceding year.
This was 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.
“Our property sales performed well, all thanks to the amazing commitment and support from our team. We will continue to monitor the market, and roll out more engagement initiatives to drive more sales. Our campaigns such as Tropicana 100 which offers 100% flexible homeownership solutions on property purchase and our Tropicana FreeDOM featuring attractive packages for completed units have received favourable responses.” he summarised.
For the current quarter Q2 FY2021 under review, the Group recorded a loss before tax (“LBT”) of RM43.5 million as the performance of the Group’s property investment, recreation, 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 of the Group has picked up during the period as compared to the corresponding period in the preceding year which was affected by the Movement Control Order.
The Group’s LBT was recorded at RM24.1 million and despite the loss for the period, the Group’s 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.
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 at Tropicana Heights, Tropicana Aman, Tropicana Metropark, as well as Tropicana Uplands and Tropicana Alma in Johor.
For the period under review, Tropicana’s unbilled sales were up by 84.6% to RM1.3 billion (Q2 FY2020: RM679 million), backed by its unique residential, commercial and resort-themed developments.
Overall, Tropicana’s total landbank stood at 2,144 acres, with a total potential GDV of approximately RM77 billion, placing the Group in a good position to unlock the value of its strategic landbank and deliver sustainable earnings in the next few years.