Corporate Update 1H FY2014 Financial Results -...

28 August 2014

Corporate Update

1H FY2014 Financial Results

Achieved 2Q FY14 PATMI of RM89.5m, +132.5% y-o-yAchieved 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 2014 Key Highlights

1H FY14 Financial Review

4

1H FY14 Financial Performance Snapshot

FYE Dec 31RM 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

5

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

6

Balance Sheet Review

FYE Dec 31RM m

Jun 302014

Dec 312013

% chg

Non Current Assets 3,632.6 3,567.7 +1.8

Current Assets 2,366.5 1,858.0 +27.4

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

Net assets per share at RM1.92

Increase in share base arising from RCULS conversion and issuance of new ESOS shares

7

Latest Net Gearing At 0.59x

1,851 1,861

1,929 1,918

1,866

2,014

1,750

1,800

1,850

1,900

1,950

2,000

2,050

Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14

Gross Debt

0.85

0.80.82

0.75

0.71

0.750.72

0.640.66

0.55 0.54

0.59

0.5

0.6

0.7

0.8

0.9


Gross Gearing Net Gearing

RM m

times

Net gearing remains manageable at 0.59x

To improve once proceeds from land sales, including partial disposal of Tropicana Aman and Bukit Bintang land are realised

• Gross proceeds total RM951m

8

Quarterly Financial Snapshots

DEVELOPMENT SALES (RM m) GROUP REVENUE (RM m)

PROFIT BEFORE TAX (RM m) EARNINGS PER SHARE (sen)

145

289 269 261209

260

125

23 10235

5094

82

90

96

0

100

200

300

400

500


Prop. Dev. Land Sales Others

67 50 49

117

25

12112

208

0

50

100

150

200

250

300

350


Core Profits Fair Value Adjsts

5.53.1 2.2

5.3 0.76.41.2

17.9

0

5

10

15

20

25


Core EPS FV Adjsts

249

804 853

260

395

540

0

100

200

300

400

500

600

700

800

900


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Sizeable Land Disposals Signed & Pending Completion

Landbank Sold Acquired AcresBook Value

(RM/psf)Sale Price (RM/psf)

StatusGross

Proceeds (RM m)

Net Gain(RM m)

Canal City land* 2013 308.72 18 35SPA signed,

19 Mar 2014471 170

Jalan Bukit Bintang, KL 2012 3.14 1,609 3,280SPA signed,8 May 2014

448 145

Kota Kinabalu, Sabah(2 parcels)

2012 1.91 303 380SPA signed,18 Jun 2014

32 1

Subtotal 951 316

* Partial disposal

1H FY14 land transactions to raise gross proceeds of RM951m on completion

Targeting more divestments of sizeable assets to improve gearing position

Sales Update

347

967

2,160

935

2011 2012 2013 1HFY2014

206

185172

127

44 44 39 37 3219 15 15

T. Heights Trop.Metropark

Trop. DangaBay

218Macalister

Others PenangWorld City

Trop. DangaCove

Trop.Cheras

Trop.Gardens

Trop.Landmark

Trop.Avenue

Trop.Grande 11

1H FY14 Sales Of RM935m

RM m

RM m

Breakdown of 1H FY14 SalesCentral Region

Northern Region

Southern Region

East Malaysia

1H FY14 SALES

Achieved RM935m sales in 1H FY14

57% of sales from Central Region projects

• Driven by Tropicana Metropark & Tropicana Heights

Targeting RM2bn sales in FY14

To be driven by RM2.6bn new launches in 2H FY14

57%23%

18%

2%

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

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High Unbilled Sales At RM2.7bn

57%24%

18%

1%

UNBILLED SALES As At 30 Jun 14Breakdown of Unbilled Sales As At 30 Jun 14 Central Region

Northern Region

Southern Region

East Malaysia

518

469 455 438

321

181

125

60 48 41 333

PenangWorld City

Trop.Gardens

Trop.Metropark

Trop.Danga Bay

Trop.Avenue

Trop.Heights

218Macalister

Trop.Cheras

Others Trop.DangaCove

Trop.Landmark

Trop.Grande

1,647

2,214 2,183 2,388

2,691

2QFY13 3QFY13 4QFY13 1QFY14 2QFY14

13

RM3.2bn planned launches in FY14

Development Estimated FY14 Launches(RM m)

Target Launch Period

1H FY14 Launches2H FY14 To Be

LaunchedLaunch Value(RM m)

Take-up Rate(%)

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

RM2.6bn planned launches in 2H FY14

Strategic focus on Central Region launches, with estimated projects GDV of RM2.2bn

Includes 2nd phase of terrace and cluster homes in Tropicana Heights and maiden launch in Tropicana Aman

14

RM2.6bn Upcoming Launches in 2H FY14

Development2H FY14 Launches

(RM m)Project

TypeNo. 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 350At KL City Centre. Part of mixed development featuring W Hotel

Tropicana Danga Bay 216 Serviced Apartments 118Tower 2 of Bora Residences; Tower 1 launched in 3Q 2013

Penang World City 235 Condominiums 437Block E & F, Tropicana Bay Residences. Blocks A-D launched in 3Q 2013

GRAND TOTAL 2,610

2HFY14 GDV BY REGION

83%

8%

9%

Central

Southern

Northern

2HFY14 GDV BY PRODUCT TYPE

33%

67%

Landed Products

HighRise Products

Strategic Initiatives

Offering 12-year education track

Elementary School (IPC)

High School (IGCSE)

Senior School (IB Diploma Programme)

Expect to open in Sep 2016

16

St Joseph’s Institution International (Malaysia)

SJII (Malaysia) AcresGross Floor

AreaStudent Capacity

Target Completion

Date

Construction Progress

InternationalSchool

6.06 333,738 sq ft 1,770 Feb 2016 5%

Earthwork & Piling Works in progress

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

JV With Agile Property Group

Prospects & Outlook

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

Delivering Growth

Strategic landbanks across Greater KL, Iskandar Malaysia & Penang Island

Near term to focus on unlocking value of landbank in Central Region, with potential GDV of RM24.5bn

20

Sizeable Landbank To Sustain Development Activities

Breakdown by GDVBreakdown by Acreage

Total 1,888 acres Total GDV of RM70.4bn

35%

52%

13%

Central Southern Northern

61%

34%

5%

Central Southern Northern

1,141651

96

RM36.4bn

RM9.5bn

RM24.5bn

New Launches Interest TenureRemaining

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 /

Leasehold62.2 130.6 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

Summary Of Future Launches

Thank you

For further information, please contact :

Mr Justin Law, Corporate Finance & Investor Relations

T : +603 7710 1018 ext 408

E : [email protected] / [email protected]

W : www.TROPICANACORP.com.my

IMPORTANT DISCLAIMERThe presentation pack is intended to provide financial and management information about Tropicana CorporationBerhad (“Company”) for investors’ information only and shall not be construed as an attempt by the Company toencourage, recommend or advise any transaction and the Company makes no guarantees in any manner as to theaccuracy of its contents.

The plans, strategies and decisions of the Company in this presentation pack except those derived from actualhistorical events, are expressions of future prospects prepared based on the information and hypothesis currentlyavailable to the management of the Company and may include various risks and uncertainties which may result ina 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 noresponsibility in any way and shall bear no liability for the results of any and all transactions conducted by youbased on the use and/or referencing of the contents in this presentation pack.

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