Tropicana Falls Into the Red in the Second Quarter, but Property Sales Increase 970 Percent

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Tropicana Corp Bhd recorded a net loss of RM25.04 million in the second quarter ended June 30, 2021 (2QFY21), compared to a profit of RM24.29 million a year ago, due to lower revenue as a result of the lockdown.

The property developer stated that the previous year’s net profit was aided by the realisation of profits on the sale of an RM241.8 million freehold development land in Johor Bahru.

Tropicana stated in its statement with Bursa Malaysia that the Movement Control Order’s various phases had a negative impact on its property investment, recreation, and resort businesses (MCO).

Quarterly revenue decreased 41.91 percent to RM194.98 million from RM335.67 million in 2QFY20, owing to lower progress billings on many significant ongoing projects in the Klang Valley and southern region due to the MCO.

Despite decreasing revenue, Tropicana’s property development and management sector continued to function well and economically, the company said, owing to robust sales and cost savings from projects.

Property development and management performed well, with sales of RM349.6 million, an astounding increase of 970.3 percent from RM32.7 million in 2QFY20.

Tropicana also lost money quarter over quarter, falling from a profit of RM2.34 million in 1QFY21 to RM240.53 million, while revenue fell 18.94 percent from RM240.53 million.

The group recorded a net loss of RM22.7 million in the first half of the year, compared to a profit of RM29.45 million in the same period previous year, as sales declined to RM435.51 million from RM478.39 million.

Tropicana anticipates continued demand for outstanding homes in established, matured, and developing townships with appealing pricing and creative ownership packages and offerings, even while the business remains challenged in the short term.

“As a result, the group will continue to be market-driven in its product offerings while also maximising the value of its land bank in key areas around the Klang Valley, Genting Highlands, and southern region.”

“Tropicana will also continue to introduce new stages across its flagship and established properties, including Tropicana Heights, Tropicana Aman, Tropicana Metropark, Tropicana Uplands, and Tropicana Alma in Johor,” the group added.

Tropicana’s unbilled sales increased by 84.6 percent to RM1.3 billion in the second quarter of FY20, from RM679 million in 2QFY20, owing to the company’s distinctive residential, commercial, and resort-themed developments.

Tropicana said its total land bank was 2,144 acres with a gross development value of RM77 billion, putting the business in a strong position to unleash the value of its strategic land bank and produce sustained revenues in the coming years.

Tropicana’s share price ended 1.92 percent or two sen lower at RM1.02, valuing the group at RM1.51 billion. The index is up 18.6 percent year to date.

Published by Zack Baharum

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