I bought some of IWCITY at closing of 76 cents.
Iskandar Waterfront sells 92.83 acres of land for RM170m
By Ahmad Naqib Idris / The Edge Financial Daily | December 1, 2015 : 9:35 AM MYT
This article first appeared in The Edge Financial Daily, on December 1, 2015.
KUALA LUMPUR: Iskandar Waterfront City Bhd (IWCity), which saw a fivefold improvement in net profit for the third quarter ended Sept 30, 2015 (3QFY15), said it had received a notice from Pentadbir Tanah Johor Baru for the compulsory acquisition of two parcels of land by the state government for RM170.1 million.
In an announcement to the exchange, the company said its wholly-owned subsidiary, Tebrau Bay Sdn Bhd, had accepted the offer for the two land parcels in Plentong, Johor, measuring a combined 92.83 acres.
“The said land acquisition by the state government will result in a profit of approximately RM69.3 million for IWCity Group, and accordingly will increase the earnings per share and net tangible asset per share of IWCity by 10.35 sen,” said the company. Its net asset per share as at Sept 30 stood at 84 sen.
Meanwhile, the company reported a 406% surge in its net profit for 3QFY15 to RM20.82 million or 3.11 sen per share, from RM4.12 million or 0.61 sen per share a year earlier.
Revenue for the quarter improved significantly to RM148.47 million, from RM25.49 million.
For the nine months ended Sept 30 (9MFY15), net profit soared 206% to RM17.21 million, from RM5.625 million in the previous year’s corresponding period; while revenue jumped 40% to RM175.33 million, from RM124.89 million.
The better performance for the cumulative period was attributed to compulsory land acquisition by the state government, pushing its property development profit to RM93.1 million, compared to its loss of RM7,000 in 9MFY14.
Meanwhile, its construction segment saw a significantly lower revenue, due to fewer construction activities and a revision in budgeted cost for the division.
Going forward, IWCity expects the external environment to remain tough, but said it will continue to be prudent in its decisions, as the group balances between growth and stability.
“The operating environment in the short term is expected to stay challenging. Market outlook has softened and sentiment is further affected by the weakening Malaysian ringgit.
“However with the unbilled sales and the portfolio of projects within our land bank, the group should be able to maintain growth, while continuing its long-term strategy to attract investors with the right products,” said the company.
IWCity fell 4.5 sen or 5.6% to 76 sen yesterday, translating into market capitalisation of RM539.1 million.