SINGAPORE - Catalist-listed Capital World saw net profit fall 15.4 per cent in the second quarter ended Dec 31 to RM14.7 million (S$4.9 million), from RM17.4 million in the year-ago period, the Malaysia-focused property developer announced on Tuesday night (Feb 12) after the market closed.
This was despite a 16.8 per cent rise in revenue to RM53.7 million from RM46 million in the year-ago period. Capital World attributed the decrease in net profit to higher cost of sales, general and administrative expenses and finance cost.
The percentage of completion used for revenue recognition was 97.1 per cent for Capital City Mall, the retail podium component of the group's mixed development in Johor, and 26.2 per cent for Capital Suites as at Dec 31, 2018. Cost of sales rose by RM10.3 million due to increased construction costs towards the completion of Capital City Mall, which began operations on Oct 17, 2018.
Capital World said it was cautiously optimistic that Malaysia's property market will recover in the mid to long term as the country's properties remain attractive to foreign buyers, while the government has also unveiled policies to aid first-time homebuyers in the recent Budget 2019.
The company said it is "determined to complete the construction of Project Capital City within the schedule" and remains focused on launching new pipeline development projects "at an appropriate timing".
Capital World shares closed unchanged at 4.9 cents before the results release.