MRCB targets RM1 billion sales for this year

PETALING JAYA (June 1): Malaysian Resources Corp Bhd (MRCB) has set a RM1 billion sales target for 2016 — a risky bet considering that its 2015 sales only amounted to RM850 million, while the real estate market remains muted.

Its executive director Mohd Imran Mohammad Salim (pictured) is, however, confident that the property developer will achieve the target as the group will give priority to projects that are expected to do well.

This includes five new launches with a collective gross development value of RM2.2 billion. They comprise high-end condominium project Sentral Suites, Menara MRCB in Putrajaya, PR1MA homes in Taman Kajang Utama, and landed properties in Bukit Rahman Putra, Sungai Buloh and Bandar Seri Iskandar, Perak.

Speaking to reporters after MRCB’s annual general meeting, Mohd Imran said the group’s earnings for the current financial year ending December 2016 (FY16) are unlikely to be affected by the slowdown in the property sector.

“Not really because we have buildings that we want to sell next year. And we are confident in the [property launches’] positioning, branding and strategy,” he said.

But while he is “bullish” about its FY16 earnings, he does not expect them to be as high as the 142.12% year-on-year growth recorded in FY15.

“I think we have to pace ourselves. We are targeting to be equally as good as last year, after taking into account the current market situation,” Mohd Imran said.

Analysts’ projection average as at yesterday, however, pointed to a 77.12% fall in MRCB’s FY16 net profit to RM75.6 million,
Bloomberg data show.

For the first quarter (1QFY16), MRCB’s net profit fell 98.16% to RM4.38 million, as previously (1QFY15) it benefited from over RM240 million gains from selling off the Platinum Sentral office building and miscellaneous items.

Earnings per share for the quarter came to 0.25 sen, versus 13.34 sen for 1QFY15, the group said in a filing with Bursa Malaysia yesterday.

However, MRCB’s construction business’ 69% increase in 1QFY16 contribution helped grow the group’s revenue by 7.88% to RM436.02 million.

The property developer said its construction arm had benefited from works for the Ampang Light Rail Transit Line extension project, and ongoing construction projects in Desaru, Johor.

“As part of its corporate transformation strategy, the group continued to make further inroads in reducing its gearing, which fell from 1.27 times at the end of 2015, to 1.22 times at the end of 1QFY16,” said MRCB in a statement.

Its net borrowings for the quarter totalled RM3.2 billion, while shareholders’ funds stood at RM2.26 billion.

The group said it will continue its strategy of focusing on its core activities of property development and investment, and construction, engineering and environment.

MRCB has property development projects with a combined gross development value of RM50 billion, and an external construction order book exceeding RM6.3 billion, it said in the statement.

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This article first appeared in The Edge Financial Daily, on June 1, 2016. Subscribe to The Edge Financial Daily here.