Corporate Update 1H FY2014 Financial Results 28 August 2014
1H 2014 Key Highlights Achieved 2Q FY14 PATMI of RM89.5m, +132.5% y-o-y Achieved 1H FY14 PATMI of RM97.3m, +18.5% y-o-y Total property sales amounted to RM935m Tropicana Collections Campaign garnered bookings of over RM600m Inked land sales worth RM951m, including 308.72 acres of Canal City land to Eco World on 19 Mar 2014 for RM471m 3.14 acres of land along Jalan Bukit Bintang to Agile Property Holdings on 8 May 2014 for RM448m Strategic Initiatives JV with Agile on property development Potential GDV of RM2.5bn to RM3.0bn JV with LAPIS on International School RM235m investment Net Gearing of 0.59x @ Jun 2014 1H Launches of RM590m Appointment of Lim Lai Seng as Chief Financial Officer on 28 August 2014 Previously Group Financial Controller at IOI Corp Bhd Highest Profit Growth Company in the Property and REIT Sector (compounded 3-year PBT) The Edge Billion Club Corporate Awards 2014 2
1H FY14 Financial Review
1H FY14 Financial Performance Snapshot FYE Dec 31 RM m 2QFY14 2QFY13 % chg 1QFY14 % chg 1HFY14 1HFY13 % chg Revenue 355.9 362.1-1.7% 299.1 19.0% 655.0 667.4-1.9% PBT 121.0 62.3 +94.2% 24.8 >100.0% 145.8 129.1 +12.9% Gains (Sale/FV) (69.9) (14.4) - (69.9) (72.5) Adjusted PBT 51.1 47.9 +6.7% 24.8 +85.1 75.9 56.6 +34.1% PATMI 89.5 38.5 >100.0% 7.8 >100.0% 97.3 82.1 18.5% Net EPS ^ 6.4 4.3 +48.8% 0.7 >100.0% 7.5 9.7-22.7% PBT margin 34.0% 17.2% 8.3% 22.3% 19.3% PATMI margin 25.1% 10.6% 2.6% 14.9% 12.3% ^ Based on weighted average share base of 1,293.5m shares for 1H FY14 and 843.0 m shares for 1H FY13 2QFY14 revenue +19% to 355.9m q-o-q while adjusted PBT rose 85.1% to RM51.1m Relatively low tax rate in 2QFY14 of 13.1% RM58.6m gain from disposal of investment properties during the period attracted zero to 5% tax 1HFY14 revenue rose 26% y-o-y after adjusting for the impact of sale of land held for development to 1HFY13 revenue of RM149.0m Adjusted PBT in 1HFY14 +34.1% to RM75.9m 4
Segmental Analysis 6 months ended 30 June (RM m) Property Development Property Invst & Resort Invst Holding & Others Consolidated 2014 2013 2014 2013 2014 2013 2014 2013 Revenue 468.1 582.5 72.0 69.0 115.0 15.8 655.0 667.4 Results from operations 71.1 121.5 89.5 42.2 1.6 (8.5) 162.2 155.1 Gains from Land Sales & Fair Value Adjustments - (60.4) (58.6) (12.1) - - (58.6) (72.5) Adjusted Results from ops. 71.1 61.1 30.9 42.2 1.6 (8.5) 103.6 82.6 Net finance cost (12.3) (11.7) (7.0) (2.6) (11.5) (14.7) (30.8) (29.1) Associates - - - - 0.3 4.1 0.3 4.1 Jointly controlled entities - - - 14.2 (1.1) 14.2 (1.1) PBT 58.8 109.8 82.5 39.5 4.5 (20.2) 145.8 129.1 Property Development Adjusted results from operations were up 16.4% in 1HFY14 Sustained by ongoing projects in Central Region (Tropicana Gardens and Metropark) and Southern Region (Tropez and Bora phases at Tropicana Danga Bay) Property Investment & Resort segment boosted by gain on sale of land amounting to RM58.6m Sharp improvement in performance of Investment Holding segment attributed to full impact of consolidation of Tenaga Kimia Sdn Bhd as a subsidiary effective May 2013 onwards 5
Balance Sheet Review FYE Dec 31 RM m Jun 30 2014 Dec 31 2013 % chg Non Current Assets 3,632.6 3,567.7 +1.8 Current Assets 2,366.5 1,858.0 +27.4 Net assets per share at RM1.92 Increase in share base arising from RCULS conversion and issuance of new ESOS shares Total Assets 5,999.1 5,425.7 +10.5 Current Liabilities 1,321.1 883.1 +49.6 Non Current Liabilities 1,790.5 1,808.6 - Total Liabilities 3,111.6 2,691.7 +15.6 Shareholders Equity 2,887.5 2,734.0 +5.6 Total Equity & Liabilities 5,999.1 5,425.7 +10.6 Total Cash 402.1 497.2 Net Gearing (x) 0.59 0.55 Total No. Of Shares (m) 1,369 1,084 Net Asset / Share 1.92 2.32 6
Latest Net Gearing At 0.59x RM m Gross Debt 2,050 Net gearing remains manageable at 0.59x 2,000 1,950 1,900 1,850 1,929 1,918 2,014 To improve once proceeds from land sales, including partial disposal of Tropicana Aman and Bukit Bintang land are realised Gross proceeds total RM951m 1,800 1,851 1,861 1,866 1,750 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 times 0.9 0.8 0.85 0.8 0.82 0.7 0.72 0.75 0.71 0.75 0.6 0.64 0.66 0.59 0.55 0.54 0.5 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 Gross Gearing Net Gearing 7
Quarterly Financial Snapshots DEVELOPMENT SALES (RM m) GROUP REVENUE (RM m) 900 500 800 700 600 500 400 300 200 100 0 804 853 540 395 249 260 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 400 300 200 100 0 82 50 35 23 94 102 96 90 125 289 269 261 209 260 145 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 Prop. Dev. Land Sales Others PROFIT BEFORE TAX (RM m) EARNINGS PER SHARE (sen) 350 25 300 250 200 208 20 15 17.9 150 10 100 50 0 12 117 121 67 50 49 25 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 5 0 1.2 5.5 5.3 6.4 3.1 2.2 0.7 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 Core Profits Fair Value Adjsts Core EPS FV Adjsts 8
Sizeable Land Disposals Signed & Pending Completion 1H FY14 land transactions to raise gross proceeds of RM951m on completion Targeting more divestments of sizeable assets to improve gearing position Landbank Sold Acquired Acres Book Value (RM/psf) Sale Price (RM/psf) Status Gross Proceeds (RM m) Net Gain (RM m) Canal City land* 2013 308.72 18 35 Jalan Bukit Bintang, KL 2012 3.14 1,609 3,280 SPA signed, 19 Mar 2014 SPA signed, 8 May 2014 471 170 448 145 Kota Kinabalu, Sabah (2 parcels) 2012 1.91 303 380 SPA signed, 18 Jun 2014 32 1 Subtotal 951 316 * Partial disposal 9
Sales Update
1H FY14 Sales Of RM935m RM m 2,160 Achieved RM935m sales in 1H FY14 57% of sales from Central Region projects 967 935 Driven by Tropicana Metropark & Tropicana Heights 347 Targeting RM2bn sales in FY14 To be driven by RM2.6bn new launches in 2H FY14 RM m 206 2011 2012 2013 1HFY2014 185 172 Breakdown of 1H FY14 Sales Central Region Northern Region Southern Region East Malaysia 18% 1H FY14 SALES 2% 127 23% 57% 44 44 39 37 32 19 15 15 T. Heights Danga Metropark Bay 218 Macalister Others Penang Danga World City Cove Cheras Gardens Landmark Avenue Grande 11
High Unbilled Sales At RM2.7bn 2,691 1,647 2,214 2,183 2,388 Sustained high unbilled sales of RM2.691bn as at 30 June 2014 Will continue to focus on project execution and delivery to translate this to revenue 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 Breakdown of Unbilled Sales As At 30 Jun 14 518 469 455 438 Central Region Northern Region Southern Region East Malaysia UNBILLED SALES As At 30 Jun 14 18% 1% 321 181 125 24% 57% 60 48 41 33 3 Penang World City Gardens Metropark Danga Bay Avenue Heights 218 Macalister Cheras Others Danga Cove Landmark Grande 12
RM3.2bn planned launches in FY14 RM2.6bn planned launches in 2H FY14 Strategic focus on Central Region launches, with estimated projects GDV of RM2.2bn Includes 2 nd phase of terrace and cluster homes in Tropicana Heights and maiden launch in Tropicana Aman Development Estimated FY14 Launches (RM m) Target Launch Period 1H FY14 Launches Launch Value (RM m) Take-up Rate (%) 2H FY14 To Be Launched Tropicana Aman 381 4Q 2014 - - 381 Tropicana Heights 742 1Q&4Q 2014 270 83% 472 Tropicana Gardens 474 4Q 2014 - - 474 The Residences 832 4Q 2014 - - 832 Tropicana Danga Bay 216 4Q 2014 - - 216 Penang World City 235 4Q 2014 - - 235 218 Macalister 320 1Q 2014 320 57% - GRAND TOTAL 3,200 590 2,610 13
RM2.6bn Upcoming Launches in 2H FY14 Development 2H FY14 Launches (RM m) Project Type No. of Units Project Details Tropicana Aman 381 Terrace Homes 432 Maiden launch Tropicana Heights 472 Terrace & Cluster Homes 396 Phase 2 of Fairfield Residences Tropicana Gardens 474 Serviced Apartments 454 RT3; after Arnica and Bayberry The Residences 832 Serviced Apartments 350 Tropicana Danga Bay 216 Serviced Apartments 118 Penang World City 235 Condominiums 437 GRAND TOTAL 2,610 At KL City Centre. Part of mixed development featuring W Hotel Tower 2 of Bora Residences; Tower 1 launched in 3Q 2013 Block E & F, Tropicana Bay Residences. Blocks A-D launched in 3Q 2013 2HFY14 GDV BY REGION 2HFY14 GDV BY PRODUCT TYPE 9% 33% 8% Central Southern Landed Products HighRise Products 83% Northern 67% 14
Strategic Initiatives
St Joseph s Institution International (Malaysia) SJII (Malaysia) Acres Gross Floor Area Student Capacity Target Completion Date Construction Progress International School 6.06 333,738 sq ft 1,770 Feb 2016 5% Offering 12-year education track Elementary School (IPC) High School (IGCSE) Senior School (IB Diploma Programme) Expect to open in Sep 2016 Earthwork & Piling Works in progress 16
JV With Agile Property Group JV with HK-listed Agile Property Holdings Ltd ( Agile ) to develop Bukit Bintang land Through 70:30 JV company owned by Agile and Tropicana respectively 3.75 acres prime land in Bukit Bintang earmarked for mixed commercial development Signing Ceremony on 8 May 2014 17
Prospects & Outlook
Delivering Growth FY14 earnings to be underpinned by 1H FY14 PATMI of RM97.3m (+18.5% y-o-y) Unbilled sales of RM2.7bn Focus on project execution and delivery for ongoing projects Targeting RM2bn sales in FY14; already achieved RM935m in 1H FY14 New sales to be driven by RM2.6bn launches in 2H FY14 83% of new launches are in Central Region, where the market remains more buoyant Remain steadfast in our transformation strategy to unlock value through development and land disposals, and accelerate our de-gearing initiatives Management team in place Near term to focus more on Central Region developments, where we have >1,000 acres with potential GDV of RM24.5bn Earmarked another RM1.2bn worth of assets for disposal Target to complete Canal City and Bukit Bintang land sales over the next 6-9 months 19
Sizeable Landbank To Sustain Development Activities Strategic landbanks across Greater KL, Iskandar Malaysia & Penang Island Near term to focus on unlocking value of landbankin Central Region, with potential GDV of RM24.5bn Breakdown by Acreage Breakdown by GDV 34% 651 5% 96 1,141 13% RM9.5bn RM24.5bn 35% 61% RM36.4bn 52% Central Southern Northern Total 1,888 acres Central Southern Northern Total GDV of RM70.4bn 20
Summary Of Future Launches New Launches Interest Tenure Remaining Land (acre) Land Cost (RM m) Total GDV (RM m) Remaining GDV @ Jun 2014 (RM m) Development Period Tropicana Gardens 70% Leasehold 14.1 5.6 2,679 2,044 7 yrs Tropicana Metropark 100% Freehold 80.7 351.7 7,165 6,335 16 yrs Tropicana Heights 100% Freehold 173.4 204.5 1,726 1,456 11 yrs Tropicana Danga Bay 60% Freehold 28.5 235.6 8,370 7,190 14 yrs Tropicana Danga Cove 50% Freehold 215.3 208.7 12,140 11,708 13 yrs Penang World City 55% Freehold 95.5 998.7 10,086 9,466 15 yrs New Projects The Residences 100% Freehold 1.3 123.0 1,150 1,150 4 yrs Tropicana Aman 100% Leasehold 863.1 955.5 13,000 13,000 20 yrs Casa Damansara 3 100% Freehold 1.1 3.5 135 135 3 yrs Bukit Bintang Land 30% Freehold 3.8 541.6 n.a. n.a. n.a. Others 100% Various 4.2 52.2 394 394 Various Tropicana City Centre 100% Freehold 21.9 146.0 3,602 3,602 8 yrs Tropicana Danga Lagoon 100% Freehold / Leasehold 62.2 130.6 2,500 2,500 15 yrs TDB Hotel & Residences 60% Freehold 6.0 85.9 1,336 1,336 4 yrs Tropicana Gelang Patah 100% Freehold 256.6 366.6 6,440 6,440 10 yrs Senibong Waterfront 70% Freehold 60.0 444.3 3,673 3,673 7 yrs GRAND TOTAL 1,887.7 74,396 70,429 21
Thank you For further information, please contact : Mr Justin Law, Corporate Finance & Investor Relations T : +603 7710 1018 ext 408 E : ir@tropicanacorp.com.my / justin.law@tropicanacorp.com.my W : www.tropicanacorp.com.my IMPORTANT DISCLAIMER The presentation pack is intended to provide financial and management information about Tropicana Corporation Berhad ( Company ) for investors information only and shall not be construed as an attempt by the Company to encourage, recommend or advise any transaction and the Company makes no guarantees in any manner as to the accuracy of its contents. The plans, strategies and decisions of the Company in this presentation pack except those derived from actual historical events, are expressions of future prospects prepared based on the information and hypothesis currently available to the management of the Company and may include various risks and uncertainties which may result in a variation of the performance and records actually announced in the future. We encourage that you make your own decision in making your investments. The Company assumes no responsibility in any way and shall bear no liability for the results of any and all transactions conducted by you based on the use and/or referencing of the contents in this presentation pack.