KUALA LUMPUR: Main Market listed property developer Yong Tai Bhd (YTB) returns to the black with a net profit of RM1.8 million for the first quarter (Q1) ended 30 June 2023 (FY23) compared to a net loss of RM5.6 million in the same quarter a year ago.
The strong recovery in earnings was attributable to the company's securing additional sales of RM66 million in Q1 FY23.
The improved sales are from the effort to focus on selling the completed property units.
During the Q1 FY23, YTB's revenue jumped more than 10 times to RM49.4 million from RM4.9 million in the same quarter last year, mainly due to its property development segment.
As for the company's property investment segment, YTB has been working with local show producers and artists to showcase their art and cultural shows, musicals, and concerts at Encore Melaka on a revenue-sharing model.
This has helped revenue increase during the quarter compared to a year ago, with contributions from rental income and the company's share of ticket sales.
Chief executive officer and executive director Datuk Wira Boo Kuang Loon said the positive earnings represent a turnaround point for the company, as the reopening of the economy helped to deliver ongoing property development projects.
"We showed our commitment towards our customers as we completed and delivered vacant possession of Amber Cove in October 2022, ahead of the contractual period," he said in a statement.
As of 30 September 2022, YTB has a total unbilled revenue of RM148 million, with Impression U-Thant on track to complete by the first quarter of next year.
YTB's property development business is expected to sustain earnings growth in the near term.
Despite the improvement in its financial performance, YTB will continue to be prudent on new property development launches as the management acknowledges that the property market remains uncertain and will continue to face challenges such as geopolitical instability, supply chain disruption, interest rate hikes, and inflation.
Sharing on the improvement seen in Encore Melaka, Boo said that while the occupancy rate of the theatre remains low due to the lack of tourist arrivals as China's zero-Covid policy continues, the company has seen an increase in interest in using Encore Melaka for events.
On 2 December 2022, the 32nd Malaysian Film Festival, organised by The National Film Development Corporation Malaysia (FINAS), will be held at Encore Melaka.
This further attests to Encore Melaka's capabilities and the recognition of its international standing as a preferred venue for such a grant event.
Going forward, YTB will continue working with various international show producers on events or shows that could boost earnings through rental income and potentially drive ancillary income from merchandise sales, accommodation, and broadcasting revenue.
Aside from that, Courtyard by Marriott Melaka, a 287-room 4-star international business luxury hotel, is also targeted to be open by the end of December 2022.
The opening of the luxury hotel operation is expected to benefit from the pent-up demand in the tourism industry.
The company would continue to explore new property development projects, such as fully integrated assisted/senior living products, and seize any other business opportunities that emerge in the post-Covid era.