BERHAD: Investment Firm’s Earnings Exceed Expectations on Robust Property Performance

Summary of Performance

An investment firm has reported strong fourth-quarter and full-year financial results, with its net profit for 4QFY25 climbing to RM99.1 million, a 20.9% year-on-year increase and a 1.7% rise quarter-on-quarter. These figures were broadly in line with market expectations. For the full financial year 2025, the Group’s net profit reached RM361.0 million, representing approximately 102% of the full-year estimate. The decline in FY25’s net profit compared to the previous year was primarily attributed to a substantial land sale gain recorded in FY24, which had boosted that year’s profit by around RM108.7 million.

Divisional Performance Highlights

The improved performance was largely driven by robust contributions from its property investment-retail, property investment-commercial, and property development segments.

The retail assets division, particularly through IGBREIT, saw its revenue jump 31.6% year-on-year to RM208.3 million, with Net Property Income (NPI) surging 44.3% to RM155.7 million. Profit after taxation for the segment increased by 14.7% year-on-year to RM365.8 million. This growth was fueled by higher rental income from Mid Valley Megamall (MVM) and The Gardens Mall (TGM), alongside new income from MVS Mall, which completed in November 2025. The segment also benefited from net fair value changes of RM241.3 million related to its investment properties. Average gross monthly rental income showed positive trends across MVM (RM18.52 psf), TGM (RM16.03 psf), and MVS Mall (RM14.2 psf).

Similarly, the property investment-commercial division, operating via IGB Commercial REIT, recorded a 14.3% year-on-year growth in gross revenue to RM68.8 million in 4QFY25, with NPI increasing 37.5% year-on-year to RM38.8 million. Year-to-date, total revenue for this division rose 12.5% year-on-year to RM259.9 million, while NPI increased 17.5% year-on-year to RM153.3 million. This uplift was attributed to higher rental income, supported by increased occupancy rates and improved average rental rates. The portfolio’s occupancy rate remained steady at approximately 92.2% in 4QFY25, with average rental rates at RM6.59 psf.

Strategic Initiatives and Future Outlook

The firm has been active in landbanking during FY25, acquiring several plots including a 19.7-acre parcel adjacent to Mid Valley Southkey for RM215 million, and a 12.7-acre plot in Section 13, Petaling Jaya for RM360 million, among others. Additionally, the disposition of its St Giles Hotel London for £220 million is projected to generate a net gain of approximately RM452.6 million for the Group.

Analysts maintain their earnings estimates for the firm. The investment bank reiterates a Neutral recommendation on the stock, with an unchanged target price of RM3.30, pegged at almost 1.0x book value.