Tropicana Corporation Berhad Annual Report 2017

STRATEGIC PERFORMANCE STRATEGIC PERFORMANCE SEC 1 > SEC 2 < SEC 3 • SEC 4 • SEC 5 • SEC 6 SEC 1 > SEC 2 < SEC 3 • SEC 4 • SEC 5 • SEC 6 32 33 TROPICANA CORPORATION BERHAD / Annual Report 2017 TROPICANA CORPORATION BERHAD / Annual Report 2017 FINANCIAL HIGHLIGHTS & INSIGHTS FINANCIAL HIGHLIGHTS & INSIGHTS Key Financial Highlights for Financial Year Ended 31 December 2017 • Total sales RM1 billion and high unbilled sales of RM1.52 billion • Net gearing decreased from 0.31x (2016) to 0.27x (2017) Group Financial Review RM’000 2017 2016 Revenue 1,908,768 1,459,405 Profit before tax (“PBT”) 288,767 168,053 Profit attributable to owners of the parent (“PATMI”) 187,476 112,537 The Group achieved total development properties sales of RM1 billion for the fiscal year 2017. The strong sales performance has sustained the Group’s unbilled sales at RM1.52 billion, where such unbilled sales level placed the Group in a comfortable position to deliver sustainable earnings performance in the current year. Group revenue in the full financial year (“FY”) ended 31 December 2017 stood at RM1.91 billion compared to RM1.46 billion in FY2016. The performance was in line with expectations with revenue contribution driven by steady construction progress from the Group’s on-going developments. For the year, Group PBT increased to RM288.8 million from RM168.1 million in FY2016, whilst profit attributable to owners of the parent in FY2017 was RM187.5 million compared to RM112.5 million in FY2016. The higher PBT was mainly attributable to strong sales performance and cost savings for a few on-going development projects. Besides that, the Group has recognised fair value gain on investment properties amounting to RM36.3 million in FY2017 whereby it was a fair value loss on investment properties of RM1.5 million in FY2016. The Group PATMI was contributed by strong performance in the Property Development segment of our on-going development projects. In FY2017, Tropicana’s developments in the Central region continue to draw healthy interest. New launches such as Sinaria, the first commercial phase of the 440-acre Tropicana Aman, Kota Kemuning has attracted a good take-up rate of 61% from buyers while Aman 1, also in Tropicana Aman, attracted a take-up rate of more than 24% within a month of its launch. The existing developments are also continuing to show strong response such as Paisley Serviced Residences in Tropicana Metropark, Subang Jaya and The Residences in the heart of Kuala Lumpur’s city centre which recorded an impressive take up rate of 90%. With unbilled sales of RM1.52 billion and strategic approaches to unlock the value of 889 acres of prime land with potential gross development value in excess of RM42.1 billion, the Group is expected to be on track to register positive earnings in FY18. In FY18, Tropicana’s strategy will remain to be market driven and adapted to market demands whilst focusing on unlocking value of its sizeable land bank in strategic locations in Klang Valley, Northern and Southern Regions. Coupled with the Group’s relentless efforts in delivering exceptional values to its customers and convincing track record, Tropicana remains well positioned on delivering sustainable growth. Detailed analysis of the various business segments are as follows: PROPERTY DEVELOPMENT & PROPERTY MANAGEMENT Group’s revenue from property development and property management segment increased by 30.7% or RM408.2 million to RM1,739.4 million from RM1,331.2 million in FY16. The segment operating profit was higher by 106.0% or RM147.7 million to RM287.1 million from RM139.4 million in FY16. The higher performance was contributed by higher profit recognition across key projects within the Klang Valley and Northern Region such as Tropicana Aman in Kota Kemuning, The Residences in the heart of Kuala Lumpur City Centre, Tropicana 218 Macalister in Penang and Tropicana Metropark in Subang Jaya. PROPERTY INVESTMENT, RECREATION & RESORT Group’s revenue from Property Investment, Recreation & Resort segment recorded at RM73.1 million as compared to RM72.3 million in FY16, increased by RM0.8 million or 1.1%. The segmental profit was 13.2% lower at RM27.5 million compared to RM31.7 million in FY16. The lower segmental profit was attributed to increase in other operating expenses from various investment properties of RM6.2 million during the financial year. Overall, the earnings from this segment continue to remain at sustainable levels through recurring incomes of its investment properties. INVESTMENT HOLDING & OTHERS Group’s revenue from this segment stood at RM96.3 million in FY17 as compared to RM56.0 million in FY16; an increase of RM40.3 million or 72.0%. The revenue from this segment continue to remain at sustainable levels which are contributed by a few subsidiaries namely Tropicana Building Materials Sdn. Bhd., Tropicana Innovative Landscape Sdn. Bhd. and Tropicana SJII Education Management Sdn. Bhd.. Group Capital Structure RM’000 FY2017 FY2016 Shareholders’ Fund 3,303,628 3,126,900 Gross Borrowings 1,847,774 1,813,264 Cash and Bank Balances 941,410 841,265 Net Borrowing 906,364 971,999 Gross Gearing ratio 0.56 0.58 Net Gearing ratio 0.27 0.31 Net Assets Per Share (RM) 2.25 2.19 The shareholders’ equity of the Group improved by 5.7% or RM176.7 million to RM3,303.6 million as at 31 December 2017. The improvement was mainly due to better operational performance and higher retention of the current profit. The Group’s financial position has strengthened considerably, with net gearing at the end of December 2017 slightly decreased to 0.27 times, as compared to 0.31 times registered as at the end of December 2016. The Group is expected to continue its satisfactory performance in year 2018 amid a more challenging business environment driven by the momentum created from the Group’s stellar performance in FY2017 and the various pipelines of on-going projects. While prospects for the property sector remains challenging in the short-term, the Group believes that there will still be demand for properties in prime locations that have accessibility to superb amenities and competitive pricing. TROPICANA CORPORATION BERHAD Annual Report 2017 ABOUT TROPICANA STRATEGIC PERFORMANCE LEADERSHIP SUSTAINABILITY GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION