Tenby International School in the Tropicana Aman township. Image source: www.tropicanaaman.com.my
Tropicana Corporation Berhad has announced a Q4 FY19 revenue of RM365 million, and a full-year revenue of RM1.1 billion. Their profit before tax (PBT) and net profit for the Q4 2019 increased by 107.9% and 354.4% to RM272.7 million and RM233.9 million respectively, while their full-year PBT and net profit increased 19.6% and 97.5% to RM383.1 million and RM335.8 million respectively.
The Group’s Q4 FY19 revenue of RM365 million was a decline of 38.5% from the corresponding period of the previous year, due to lower progress billing in some of the Group’s key ongoing project developments and lower sales due to the challenging market.
The Group’s PBT, however, rose by 107.9% to RM272.7 million as compared to the RM131.2 million achieved in the corresponding period of the previous year. The spike in PBT is attributed to the negative goodwill that arose when Tropicana acquired land banks that were held by twelve acquiree companies from a related party, at an average discount of 13.4% to the market value. This corporate exercise was completed in November 2019. Due to this, the Group’s net profit surged by 354.4% to RM233.9 million in Q4 FY19 from RM51.5 million in Q4 FY18.
The Group’s revenue declined by 31.5% from the corresponding previous quarter, due to lower progress billings in their ongoing projects in the Klang Valley and southern region. However, due to the above mentioned corporate exercise completed in November 2019, their PBT increased by 19.6% from RM320.2 million in 2018 to RM383.1 million in 2019. This, in turn, increased their net profit by 97.5% to RM335.8 million in 2019 from the RM170.0 million in 2018.
Despite the challenging property market, the Group believes that the government will continue to support the demand for affordable homes for first time home buyers in 2020. And working with this, the Group also believes that demand for homes in prime locations with attractive pricing will continue to be strong.
Following that, Tropicana looks to launch new developments in its signature Tropicana townships with a GDV surpassing RM2 billion. A key highlight would be their maiden development Tropicana Grandhill. Sited in Getting Highlands about 3,000 metres above sea level, this township will comprise 112 acres and carry a potential GDV of between RM12 and RM15 billion. The first phase of Tropicana Grandhill will comprise TwinPines Serviced Suites with over 1,400 units of serviced apartments.
Their other new and upcoming developments in 2020 will include Shoppes & Residences (South), a mixed development of retail lots and serviced apartments at Tropicana Metropark, Subang Jaya, three upcoming landed residential phases at Tropicana Aman, Kota Kemuning, the sixth residential and commercial phase at Tropicana Heights, Kajang, Tropicana Miyu condominiums at Jalan Harapan, Petaling Jaya, and shop offices at Gelang Patah, Johor.
Their successful launch of Elemen Residences, the first phase of a lakeside home development in Tropicana Aman in Kota Kemuning, and Edelweiss SOFO & Serviced Residences, the final phase of Tropicana Gardens in Tropicana Indah at the end of 2019, are expected to contribute positively to the Group’s earnings in 2020 and the coming years.
The Group’s landbanks increased to 1,754.1 acres in 2019 and carries a potential GDV of RM61.5 billion. Coupled with joint development agreements for 1,235 acres of land with a potential GDV of RM4.8 billion, the Group continues to stand strong in development offerings. Looking ahead, Tropicana will stay focused on their new product offerings, and unlock the potential value of their landbanks in strategic locations in the Klang Valley, Genting and the Southern region of Peninsular Malaysia.
(3 March 2020)