Tropicana Corporation Berhad Annual Report 2018

TROPICANA CORPORATION BERHAD 32 ABOUT TROPICANA OUR STRATEGIC PERFORMANCE OUR LEADERSHIP SUSTAINABILITY AT TROPICANA FINANCIAL HIGHLIGHTS & INSIGHTS Key Financial Highlights for Financial Year Ended 31 December 2018 • Total sales RM697.4 million and high unbilled sales of RM827.2 million • Net gearing increased from 0.28x (2017) to 0.29x (2018) Group Financial Review RM’000 2018 2017 Revenue 1,635,471 1,814,774 Profit before tax (“PBT”) 320,231 278,428 Profit attributable to owners of the parent (“PATMI”) 179,812 189,689 The Group achieved total sales of development properties of RM697.4 million for the fiscal year 2018. The strong sales performance has sustained the Group’s unbilled sales at RM827.2 million, where such unbilled sales level places the Group in a comfortable position to deliver sustainable earnings performance in the current year. The Group’s revenue in the full financial year (“FY”) ended 31 December 2018 stood at RM1.64 billion compared to RM1.81 billion in FY2017. The performance was in line with expectations with revenue contribution driven by steady construction progress from the Group’s on-going developments. For the current year under review, the Group’s PBT increased to RM320.2 million from RM278.4 million in FY2017, whilst net profit attributable to owners of the parent in FY2018 was RM179.8 million compared to RM189.7 million in FY2017. The higher PBT was mainly attributable to higher gross profit margins resulting from cost savings for a few on-going development projects. Besides that, the Group has recognised a gain of RM24.4 million on the disposal of a joint venture. The Group PATMI was contributed by strong performance in the Property Development segment of our on-going development projects. With unbilled sales of RM827.2 million and strategic approaches to unlock the value of 1,088 acres of prime land with potential gross development value in excess of RM46.1 billion, the Group is expected to be on track to register positive earnings in FY19. In FY19, Tropicana’s strategy will remain market driven and adapted to market demands while focusing on unlocking value of its sizeable land bank in strategic locations in Klang Valley, Genting 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 to deliver sustainable growth. The Group plans to introduce new developments and phases within the existing and new signature Tropicana townships amounting to a GDV of more than RM3.2 billion. Within Klang Valley are the second phases of shop offices, Triana, and two residential phases including a phase under the Tropicana Urban Homes collection at Tropicana Aman, Kota Kemuning; the fourth landed residential phase, Lakefield Residences at Tropicana Heights, Kajang; a mixed development comprising retail lots and serviced apartments at Tropicana Metropark, Subang Jaya; a new phase of serviced apartments and SOHOs at Tropicana Gardens, Kota Damansara; as well as condominiums at Jalan Harapan, Petaling Jaya. Aside from the Central Region, other launches include landed homes, Ayera Residences at Tropicana Danga Cove and the first landed residential phase at Tropicana Sanctuary, both of which are located in Johor in the Southern Region. Tropicana will also launch its maiden development at Genting which is a well patronised hill resort, towards the fourth quarter of 2019. Detailed analysis of the various business segments are as follows: Property Development & Property Management The Group revenue from the property development and property management segments decreased by 12.3% or RM201.6 million to RM1,443.2 million from RM1,644.8 million in FY17. The segmental operating profit was higher by 2.9% or RM8.0 million to RM284.1 million from RM276.1 million in FY17. The higher performance was contributed by higher profit recognition and cost savings across key projects within the Klang Valley and Southern Region such as Tropicana Aman in Kota Kemuning, Tropicana Metropark in Subang Jaya, Tropicana Gardens in Kota Damansara and Tropicana Danga Bay in Johor.