KUALA LUMPUR (Dec 13): O&C Resources Bhd (OCR) said it is optimistic of the long-term prospects of the group, which will be mainly driven by the earnings visibility from its construction and property development divisions.

In a statement today, OCR said the outlook is supported by its RM670 million orderbook as of October this year, as well as its 104-acre landbank — spread across the Klang Valley, Kuantan and Melaka — which has a gross development value (GDV) of RM870 million.

"Besides the launched Isola @ KLCC, we have upcoming projects such as PRIYA Scheme at RM166 million GDV, a Kuantan project at RM330 million GDV and a Melaka project at RM134 million GDV," said OCR managing director Billy Ong Kah Hoe.

Ong noted that the group is "well-positioned" to capitalise on any opportunities that arise given its relatively low net gearing is at 0.11 times.

Meanwhile, on the construction business, the major projects that will contribute to the group's earnings moving forward are the PR1MA Melaka (RM101 million), PR1MA Bukit Jalil (RM155 million), PPA1M Putrajaya (RM324 million) and Tiara Bangi Homes (RM90 million).

"These projects will keep us busy for the next three to four years. The revenue visibility from this segment is far greater today, as compared to the past," Ong said.

On a separate note, the group announced a rise of 269% in net profit for the first quarter ended Oct 31, 2017 (1QFY18) to RM1.06 million, from RM288,000 a year earlier, thanks to increased profits from both the construction and property development divisions.

Quarterly revenue surged 80% to RM21.52 million from RM11.96 million in 1QFY17, mainly due to an increase in progressive recognition of revenue from the property development segment, it said in its bourse filing.

At today's annual general meeting, OCR had obtained its shareholders' nods for all resolutions tabled, including the name change from 'O&C Resources Bhd' to 'OCR Group Bhd', which is part of its rebranding strategy.

"We have successfully turned to the black in the financial year ended July 31, 2017 (FY17) and are now making encouraging progress towards all of our medium-term performance targets, particularly in optimising the balance sheet and bringing additional cash into the business. In FY17, the major revenue contribution stemmed from our construction business and we expect this to be maintained in FY18," Ong said.

"Nevertheless, there will be earnings recognition from our property development division, mainly derived from our RM240 million GDV project — Isola @ KLCC. To date, we have achieved a take-up rate of 80%," he added.

OCR's share price rose 0.5 sen or 0.96% to close at 52.5 sen, valuing it at RM153.51 million. — theedgemarkets.com

For more stories, download EdgeProp.my pullout here for free.

SHARE
RELATED POSTS
  1. Melaka to probe condo buyers' allegations of not receiving quality homes
  2. Housing developers in Melaka required to build low, medium-low cost houses in projects
  3. Chin Hin Group Property buys land in Melaka to build RM1.01b residential development