YTL sees further growth after supernormal profits

First-half earnings cross Rm1bil, surpassing previous financial year’s bottomline

“The group’s earnings before interest, tax, depreciation and amortisation almost doubled, increasing to Rm4.8bil for the half-year ended Dec 31, 2023 compared to Rm2.5bil for the same period last year.”

Tan Sri Fancis Yeoh Sock Ping

PETALING JAYA: The Yeoh family’s YTL Corp Bhd reported a super-normal net profit crossing Rm1bil in its latest first-half financials, surpassing its bottomline in the entire previous financial year.

The conglomerate’s three other listed subsidiaries also posted strong results for the first half ended Dec 31, 2023 (1H24), fuelled by higher contributions from the utilities, cement and Australian hotels businesses.

The subsidiaries were YTL Power International Bhd, Malayan Cement Bhd and YTL Hospitality Real Estate Investment Trust (REIT).

Stepping further into the second-half of financial year 2024, YTL Corp painted a positive outlook, saying that its construction segment looks to ensure work progress remains on track, while continuing to replenish its orderbook.

The cement business expects to see a growth in demand, driven by civil and non-residential ventures.

The property segment is expected to benefit from increased demand and the group looks to introduce “adaptive products” in the near future.

The hotel segment, while faced with short-term challenges, has long-term positive prospects.

YTL Corp also sees more growth opportunities in the power generation, water and sewerage, telecommunications and data centre ventures.

In 1H24, YTL Corp announced that its net profit surged by more than eight-fold yearon-year (y-o-y) to Rm1.11bil as compared to Rm133.53mil a year earlier.

Revenue rose by 15% y-o-y to Rm15.05bil. Executive chairman Tan Sri Fancis Yeoh Sock Ping said in a statement that YTL Corp’s improved performance was contributed by “almost all business segments”.

The construction segment, in particular, registered a drop in revenue and pre-tax profit due to a slowdown in the progress of the construction works.

“Overall net profit surged 515% to Rm1.97bil on the back of a 15% growth in revenue, driven primarily by the utilities and cement divisions.

“The group’s earnings before interest, tax, depreciation and amortisation almost doubled, increasing to Rm4.8bil for the half-year ended Dec 31, 2023 compared to Rm2.5bil for the same period last year,” he said.

Yeoh and his family control a 50% stake in YTL Corp.

In the second quarter ended Dec 31, 2023 (2Q24), YTL Corp’s net profit jumped by slightly over six-fold to Rm589.22mil, while revenue rose by 14.2% y-o-y to Rm7.53bil.

The construction segment saw lower construction costs, while the cement business benefited from higher volume and stabilisation in selling prices.

As for the property investment and development segment, a lower pre-tax loss was seen following the profit recognition from an ongoing project, coupled with higher rental and interest income by YTL Land & Development Bhd.

Meanwhile, the hotel segment posted an increased pre-tax profit in the second quarter, due to a gain in market share, higher occupancy and room rates across all hotel assets.

With the surge in net profit, YTL Corp’s basic earnings per share rose to 5.37 sen. However, the group did not declare a dividend in the quarter.

YTL Corp’s strong financial performance in the six-month period follows a string of positive news reports about the YTL group of companies in recent times.

These include the artificial intelligence data centre hub it will build in Johor in partnership with Nvidia Corp, which makes chips that power CHATGPT.

YTL Corp was also reported to have put in a bid for the Kuala Lumpur-singapore High Speed Rail project.

Most recently, it was announced that YTL Corp and YTL Power will be included in the MSCI Malaysia Index, after both stocks rallied by 284% and 411% in the past year.

In a separate filing yesterday, YTL Power reported that its 2Q24 net profit rose by over four-fold y-o-y to Rm845.12mil from Rm198.82mil a year earlier.

Revenue increased by 14.3% y-o-y to Rm5.37bil.

Segment-wise, the pre-tax profit of YTL Power’s power generation business more than tripled in the second quarter due to higher margins and the strengthening of the Singapore dollar against the ringgit.

Meanwhile, the water and sewerage segment fell in deeper losses, following increased interest accruals on index-link bonds of Rm154.6mil.

As for the telecommunications segment, the pre-tax profit narrowed by 8% y-o-y in 2Q24, thanks to higher project revenue.

For the six-month period ended Dec 31, 2023, YTL Power’s net profit jumped by over four-fold to Rm1.69bil from Rm372.1mil a year earlier.

The revenue increased by 14.5% y-o-y to Rm10.82bil.

YTL Power chairman Yeoh said: “The group’s improved performance stemmed mainly from better margins in the power generation segment.

“The water and sewerage segment recorded higher revenue due to new contracts secured within the non-household retail market, although higher interest accruals on index-linked bonds continued to have a non-cash impact on profit,” he said.

Malayan Cement, in which YTL Corp controls a stake of almost 79%, reported a net profit of Rm121.18mil in 2Q24, which was an increase of nearly eight-fold from Rm15.26mil a year earlier.

Revenue jumped by about 29% y-o-y to Rm1.16bil.

Cumulatively, for the 1H24, net profit rose by over 13-fold y-o-y to Rm217.28mil,

while revenue increased by 31.4% y-o-y to Rm2.31bil.

Yeoh, who is Malayan Cement’s chairman, said: “The improved performance was due mainly to higher volumes and stabilisation in selling prices for both domestic cement and ready-mixed concrete, with this stabilisation cushioning the impact of higher energy costs.”

The other unit of YTL Corp that reported its latest financials yesterday was YTL Hospitality-reit.

Its net profit moved north by 66.3% y-o-y to Rm41.4mil in 2Q24 as the revenue increased by 11.6% y-o-y to Rm145.21mil.

YTL Hospitality recorded an earnings per unit of 2.43 sen in the quarter under review.

Cumulatively, for the six-month period, the REIT’S revenue rose 14% y-o-y to Rm276.1mil.

Net property income (NPI) increased to Rm144mil for the half-year under review compared to Rm124.4mil for the same period last year, while income available for distribution grew 37% to Rm79.1mil this year compared to Rm57.9mil for the same period last year.

Pintar Projek Sdn Bhd, the manager of YTL Hospitality-reit, declared an interim distribution of 4.1781 sen per unit for the six months from July 1 to Dec 31, 2023.

The total income distribution amounts to Rm71.2mil, representing approximately 90% of the total distributable income for the financial period ended Dec 31, 2023.

Yeoh, who is the chairman of Pintar Projek, said: “In the hotel segment, better performance of our Australian portfolio resulted from higher international arrivals and events held in Australia, improving average occupancy and daily room rates.

“In the property rental segment, the increase in revenue and NPI was contributed by the new Hotel Stripes Kuala Lumpur, acquired on Oct 31, 2023,” he said.