Tropicana profit seen improving this year after buoyant Q1

An artist’s impression showing the view from the sky gym of the Tropicana Metropark project in Subang Jaya.

PETALING JAYA: Property developer Tropicana Corp Bhd, which recorded a year-on-year net profit growth of over 140% for its first quarter ended March 31, is expected to see improved earnings this year as more projects come on-stream.

“We expect sales to pick up, as Tropicana only did a soft launch for Tropicana Aman in the second quarter of 2015, which was well-received by the market,” said Kenanga Research in a report yesterday.

UOB Kay Hian Research in its report yesterday concurred: “We expect full-year earnings to improve in the following quarters, as initial quarters would have been seasonally slower.”

Tropicana’s net profit for its first quarter surged 146% to RM19.28mil from RM7.83mil in the previous corresponding period due to higher revenue across key projects and proceeds from land sales.

Revenue during the period increased to RM390.92mil from RM252.68mil in the previous corresponding period. UOB Kay Hian Research said net profit has been seeing improved margins.

“Net margin rose to 16.2% in the first quarter of 2015, as a result of lower finance charges after the company’s move to capitalise the interest expense incurred based on the progress billings of the projects, as well as its developments going through to more advanced stages, and hence, the improvement in margins.”

In a statement on Monday, Tropicana said first quarter earnings were driven by 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 the Klang Valley.

“The marketing strategy for 2015 will be to vary and adapt launches to suit market demand – incorporating higher components of landed properties.

“The group will focus on projects in the central and northern regions for 2015, where the markets are more resilient,” it said.

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