Guocoland's 4Q profit down 45%, plans 2 sen dividend

KUALA LUMPUR (Aug 26): Property developer Guocoland (Malaysia) Bhd’s final quarter ended June 30, 2016 (4QFY16) saw a 45% decline in net profit to RM94.4 million, from RM171.4 million a year ago.

The weaker earnings was due to the doubling of administrative, selling and marketing expenses, and higher finance costs, besides a loss of RM5.5 million from a discontinuing operation — compared to a RM99.3 million gain in 4QFY15.

Revenue in 4QFY16 grew 10.7% to RM65.3 million, from RM59 million in the same period last year, due to higher contribution from its office block project in PJ City Parcel A Phase 2, Guocoland said in a filing with Bursa Malaysia.

The group posted a profit before tax of RM109.1 million in 4QFY16, compared to RM81.2 million last year, due to a gain on disposal of DC Tower that contributed RM83.5 million.

The gain was however partly offset by a year-on-year decrease in fair value gain on investment properties of approximately RM56.7 million.

Guocoland proposed a final single-tier dividend of two sen for the financial year ended June 30, 2016 (FY16). The entitlement date and payment date would be announced later.

For the full year (FY16), Guocoland’s net profit fell 35.6% to RM121.6 million, from RM188.8 million in FY15, largely on higher cost of sales, administrative, selling and marketing expenses, higher finance costs and lower share of results from associates and joint ventures.

There was also a loss of RM7.33 million from discontinuing operation, compared with a profit of RM96.92 million in FY15.

Cumulative revenue however rose 61.3% to RM315.6 million, from RM195.56 million, mainly due to disposal of the Changkat Kia Peng land, coupled with improved contribution from the residential project in Damansara City, though this was partly offset by lower contributions from its projects in Old Klang Road and Kajang.

Going forward, its board foresees a challenging year ahead, but will continue to focus on the timely completion of its development projects, while monetising its inventories.

Yesterday, Guocoland closed down two sen or 1.63% at RM1.21 today, valuing it at RM847.5 million.— theedgemarkets.com

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