Ibraco’s outlook to stay positive in second half of the year despite slow market

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KUCHING: Analysts are confident that local property developer Ibraco Bhd (Ibraco) will continue to record more sales in the second half of the year (2H16) despite soft sentiments for the sector.

The research arm of M&A Securities Sdn Bhd (M&A Research) in a report yesterday said it was positive that Ibraco will book further sales in 2H16 given the property developer’s continuous marketing efforts to drive sales of on-going projects and to convert the booking activity into revenue.

The research firm gathered that the property developer’s sales are expected to be spurred by new launches in Kuching and Bintulu areas, whilst KL Skyline Suites, a mixed commercial cum residential project located at Jalan Tun Razak, Kuala Lumpur is expected to contribute to the company’s accounts later this year.

In addition to the KL Skyline Suites project, M&A Research noted that  Ibraco is promoting a few projects that will keep the company busy for the rest of the year.

Ibraco is prepared to launch Tabuan Tranquility Phase 3 (TT3) Plaza comprising shopoffice, small office home office (SOHO) and education block.

The research firm estimated that the sales of those projects is expected to meet the company’s property sales target.

M&A Research gathered that Ibarco has set a sales target of RM320 million for financial year 2016 (FY16) ending Dec 2016.

“The sales target will be contributed by new property launches and unsold stocks or units collectively worth about RM890 million,” it estimated.

In the meantime, Ibraco recorded  RM59.9 million of new sales in the second quarter of 2016 (2Q16), which brought property sales in the first half of 2016 (1H16) to RM98.1 million.

Meanwhile, Ibraco told Bursa Malaysia last Friday that the group registered higher revenue and earnings for 2Q16.

The property developer added 2Q16 net profit increased by 48.5 per cent year-on-year (y-o-y) to RM11.36 million while revenue grew by 16 per cent y-o-y to RM60.69 million.

The property developer said the higher revenue generated during 2Q16 was attributed to property sales recognised from the sales of residential houses at Tabuan Tranquility Phase 2, sales of apartments at Stutong Heights, sales of condominiums at the Park Residence, sales of three-storey shop offices at TT3 and Bintulu Town Square, sales of shop lots at Bintulu Town Square as well as rental income from investment property.

Looking ahead, Ibraco said it plans to launch more projects comprising mainly residential and commercial properties in 2016 and future years.