SINGAPORE (Nov 8): Yoma Strategic Holdings reported 2Q19 earnings of $26.2 million, up sevenfold from $3.7 million a year ago as revenue as investment properties saw a fair value gain.

Revenue for 2Q19 increased 26.5% year-on-year to $41.9 million lifted by the robust performance of the Yoma Land, Yoma F&B and Yoma Financial Services businesses, which helped offset a slower performance in the Yoma Motors business.

Revenue from the group’s Real Estate Development business more than doubled year-on-year to $22.6 million in 2Q19. The increase was mainly driven by new sales of apartments in StarCity Galaxy Tower 2 and Tower 4, which are nearly completed as well as the residual revenue recognition from previously sold units in Pun Hlaing Estate, StarCity Zone C and Yoma Central.

As part of the group’s effort to build up its recurring rental income and tap into the more robust serviced apartment sector, the group transferred 200 units in Galaxy Tower 2 and Tower 4 and the remainder of StarCity Zone C from development properties to investment properties. This resulted in a fair value gain of $58.5 million recognised in its other income.

Yoma F&B reported a smaller operating loss of income and $356,000 compared to $416,000 a year ago as revenue from its KFC business grew 40.3% y-o-y to $4.6 million, which was generated from new store openings and same-store sales growth.

Yoma Motors saw operating loss widened to $946,000 from $61,000 mainly due to the startup cost of the Volkswagen showrooms in Yangon and Mandalay, which are expected to be fully operational in the coming months.

Core operating EBITDA for Yoma Financial Services increased by 43.2% year-on year and the group expects the growth to continue with the fast expansion of Yoma Fleet which partnered with Myan Shwe Pyi Tractors, the authorised dealer of Caterpillar-branded heavy equipment in the country. Wave Money was not included in core operating EBITDA in the review as it is an associated company of the group.

However, Yoma Strategic says Wave Money has expanded its nationwide network of agents to 34,000 from 26,000 a quarter ago. In 2Q19, revenue and transaction numbers grew by over 60.1% and 74.7% q-o-q, respectively, and the business achieved a cash-flow breakeven point in September.

Melvyn Pun, CEO of Yoma Strategic, says, “I’m encouraged by the turnaround in real estate... Elsewhere, the Consumer business has been growing rapidly, with KFC enjoying same store sales growth and a successful expansion outside of Myanmar’s two major cities, Little Sheep’s upcoming launch and the addition of Auntie Anne’s to our F&B franchise portfolio.”

Year to date, shares in Yoma have nearly halved to Wednesday’s close of 28 cents.