KUALA LUMPUR (Nov 27): Tropicana Corporation Bhd (KL:TROP) announced it posted a net loss of RM454.93 million for the three months ended Sept 30, 2024 (3QFY2024) as a result of the recognition of one-off losses of RM474.8 million.

Its quarterly net loss was at RM10.34 million in the previous corresponding quarter.

Quarterly revenue shrunk 49% to RM201.87 million from RM402.76 million in the same quarter of 2023. The company did not declare a dividend for the quarter under review.

The revenue contraction was largely attributed to lower progress billings from key projects in the Klang Valley, Southern, and Northern regions.

Apart from that, the decline in revenue was also attributed to lower sales consideration related to the disposal of development land as compared to the corresponding quarter in the preceding year, said Tropicana in the quarterly result filing to the stock exchange.

On the large one-off provision, Tropicana said its proposed disposal of investment property and three parcels of development land for consideration of RM891.6 million have given rise to a “provision for foreseeable losses” which resulted in this quarter’s result to be weaker than the corresponding quarter in the preceding year.

Despite the substantial loss, Tropicana remains optimistic, noting that the provision for foreseeable losses will eventually be mitigated by the cost savings from its low-cost housing obligation. These savings are expected to be recognised progressively over the next five years and will contribute positively to the group’s future earnings.

Meanwhile, for the nine-month period ended Sept 30, Tropicana’s net loss widened to RM420.45 million, compared to a loss of RM15.26 million a year ago.  

Revenue dropped to RM877.84 million from RM1.12 billion in the previous year. Excluding the proposed asset disposals, according to Tropicana, it would have recorded a higher profit before tax of RM38.9 million against RM26.6 million a year ago. This was mainly contributed from lower finance cost incurred, which was consistent with the group’s strategy to reduce overall debt level via assets monetisation.

The decline in revenue was also attributed to the absence of income from the divestment of investment properties and a reduction in land sale proceeds compared to the previous year.

Looking ahead, Tropicana remains focused on improving its sales performance and is confident of its long-term prospects.  

The company plans to continue leveraging sales initiatives and marketing campaigns to secure more sales and strengthen its property development business. Tropicana also intends to focus on developing and marketing properties at strategic locations, which it believes will drive future sales and contribute positively to the group's earnings.

Tropicana’s management emphasised that its financial position would strengthen with the handover of vacant possession for six projects this year, including Tropicana Aman, Tropicana Miyu, Tropicana Metropark, and Tropicana Uplands.  

Tropicana's shares gained two sen at RM1.19, giving it a market capitalization of RM2.98 billion.