KUALA LUMPUR (Aug 30): IGB Bhd (KL:IGBB) on Friday reported that its latest second quarter net profit dropped 33% from a year earlier, mainly due to reduced contribution from its property development and construction segments, alongside lower foreign exchange gains.

Net profit for the three months ended June 30, 2024 (2QFY2024), fell to RM75.2 million from RM112 million in 2QFY2023, despite revenue inching up 4% to RM396.8 million from RM382.2 million on higher contribution from its retail, commercial and hotel segments.

Earnings per share dropped to 5.59 sen from 8.30 sen, the property developer's bourse filing showed. No dividend was declared for the quarter under review.

IGB said revenue from its commercial properties rose 8% to RM56.6 million in 2QFY2024 from RM52.4 million in 2QFY2023, while its retail property segment saw a 6% increase to RM149.1 million from RM140.4 million.

The hotel segment recorded the largest increase, with revenue rising 38% to RM78.9 million from RM57.3 million.

For the six months ended June 30, 2024 (6MFY2024), IGB's net profit climbed 55% to RM260.5 million from RM168.1 million in 6MFY2023, while revenue increased 4.5% to RM813.2 million from RM778.3 million.

Looking ahead, IGB said it is cautiously optimistic about its results for FY2024, as it noted rising cost of living and increased service tax rate posing challenges for its retail property segment. Nevertheless, wage growth, the introduction of flexible withdrawal for EPF savings and the cash aid given by the government may boost retail spending in the second half of the year.

For the commercial property segment, IGB said it will continue to focus on leasing office spaces with flexible tenant programme, while asset management strategies will aim for cost efficiency and sustainability.

Its hotel segment is expected to perform well, it said, due to the recovery in travel and tourism, supported by visa-free travel for Chinese tourists.

“There are challenges in the residential property market, such as credit access, affordability and inflation, which are expected to persist for the remainder of 2024," IGB flagged. However, it remains optimistic about its upcoming Southpoint Residences launch in Kuala Lumpur.

Shares in IGB rose four sen or 1.51% to close at RM2.69 on Friday, valuing the company at RM3.65 billion.