KUALA LUMPUR: I-Berhad, the master developer of I-City, recorded a 180 per cent increase in pre-tax profit to RM4.95 million in the first quarter of the financial year 2024 (Q1 2024) compared to Q1 2023.
Despite a drop in revenue from RM44.5 million to RM40.6 million, the company said the profit growth is indicative of its sound financial management and strategic vision.
The company attributed the decline in revenue to the property development segment's inventory being cleared during that same quarter.
"In Q1 2024, the property development segment contributed RM7.99 million to revenue. The successful launch of BeCentral Tower 1 and positive reception of BeCentral Tower 2 demonstrate market confidence in its projects, while its partnership with Wyndham International to establish Wyndham Suites KLCC will enhance the appeal of its property portfolio and facilitate inventory clearance," the company said.
The company's unbilled sales stood at RM97.2 million as of March 31 this year, up from RM94.5 million in 2023, reflecting sustained demand for i-City.
Meanwhile, I-Berhad said Central i-City Mall did better, shifting from a loss of RM399,000 in Q1 2023 to a gain of RM1.43 million this year, showcasing the success of its strategic investments and collaborative ventures.
The leisure and hospitality segment saw a 26 per cent revenue growth, increasing from RM20.6 million to RM25.9 million, driven by higher sales at the five-star DoubleTree by Hilton i-City and Best Western i-City, as well as the Digital Sports Arena and Immersive Winterland.
The company's investment property portfolio also did better, with revenue rising to RM5.93 million from RM5.73 million in Q1 2023.
Key investment properties, such as the Grade A GBI Corporate Tower Mercu Maybank, car parks, and the tier-3 data center in i-City, generated consistent rental income.
I-Berhad plans to strengthen its financial position through a capital raising exercise to raise RM100 million via the issuance of redeemable preference shares (RPS) with a 3.0 per cent dividend rate.
I-Berhad said the RPS issuance will not dilute existing shareholders' interests since the RPS are not convertible into ordinary shares, preserving shareholder value while raising the necessary capital.
The flexibility to issue the RPS in multiple tranches over three years allows I-Berhad to align its funding requirements with project timelines and cash flow needs, providing significant financial flexibility and certainty.
I-Berhad said this proposed funding is a testimony of the strong confidence and
support of the founder and largest shareholder, Tan Sri Lim Kim Hong, and will be pivotal in enhancing the company's financial strength and resilience.
"The 3.0 per cent non-cumulative dividend rate on the RPS makes this a very attractive option for securing long-term funding compared to existing borrowing costs, which range between 4.21 per cent and 5.0 per cent.
"This will also significantly lower financial costs and improve cash flow management," the company said.
I-Berhad said the funds raised will primarily finance the completion of BeCentral Residences and other future projects.
"This will spur the development of the remaining RM5 billion gross development value and grow the RM1 billion investment property portfolio," it
