Capital World's Q2 net profit up 90%

MALAYSIAN property developer Capital World posted a net profit of RM17.4 million (S$5.9 million) for its second quarter ended Dec 31, 2017, up 90 per cent from RM9.2 million a year ago, on the back of an increase in revenue due to higher percentage of works completed.

Revenue soared to RM46 million for the quarter, up from RM18 million previously, mainly due to higher revenue recognition from Capital 21, the retail podium component of the group's mixed development project in Johor, Malaysia, and its serviced suites component Capital Suites, which is in line with higher percentage of works completed.

Earnings per share stood at RM1.37 cents for Q2, up from RM0.85 cent a year ago.

No dividend was declared for the quarter.

In its outlook, Capital World pointed out that Singapore and Malaysia have inked a legally binding bilateral agreement to build a cross-border MRT system, allowing commuters to travel seamlessly between Woodlands and Johor Bahru. The construction is expected to commence in 2019 and to be completed by end-2024.

"These positive developments will augur well for the group's existing and upcoming development projects in Johor Bahru," said the group in a filing to the Singapore Exchange.

Siow Chien Fu, executive director and CEO, said the group has entered into an agreement to acquire 100 per cent equity interest in Kekal, which holds the joint development right to develop five plots of land which are strategically located near Pengerang Complex, one of the major oil and gas hubs in South-east Asia.

"It is expected to generate thousands of job opportunities by 2020, driving the demand for the property sector in Pengerang," he said.

The group has also launched the indoor theme park concept at Project Capital City on Jan 13. Upon completion, it will be one of the five largest indoor theme parks in the world and is expected to commence operations in 2018, transforming Project Capital City into a one-stop lifestyle and entertainment hub and a potential tourist destination in Johor Bahru, said Mr Siow.

"Moving ahead, the group will remain focused on seeking business opportunities to form strategic partnerships and joint ventures with potential landowners and developers in Malaysia as well as in South-east Asia," he added.

Capital World listed on the Catalist board via a reverse takeover of marble company Terratech Group on May 5, 2017.