SINGAPORE (Nov 15): Capital World, formerly known as Terratech Group, reported 1Q18 earnings rose 33.8% to RM19.7 million ($6.4 million) on the back of a 59.5% increase in revenue due to higher percentage of works completed.
Capital World seeks property development joint ventures with landowners to minimise initial capital outlay.
The increase in revenue was mainly due to higher revenue recognition from Capital 21, the retail podium component of the group’s mixed development project in Johor, Malaysia, and its serviced suites component, Capital Suites.
In tandem with the increase in revenue, gross profit increased by 39.3% year-on-year to RM31.7 million in 1Q18 with a gross profit margin of 71.7%.
The increase in general and administrative expenses of RM2.8 million to RM4.1 million in 1Q18 from RM1.3 million in 1Q17 was mainly attributable to higher payroll related costs from the additional headcounts, and the additional depreciation and amortisation expenses from the fair value upward adjustments on the plant and equipment and mining rights as a result of the reverse takeover accounting in FY17.
Capital World says the prospects of the property industry in Johor remain bright with upcoming economic developments. In addition, there is a shift in Johor’s economy from manufacturing to services in recent years, with tourism contributing significantly to the local economy.
Shares in Capital World closed 0.3 cent higher at 9.3 cents.
