Mitrajaya's 4Q profit jumps 77%; buys more land via new JV

KUALA LUMPUR (Feb 28): Mitrajaya Holdings Bhd, which announced a 77% jump in its final quarter of financial year 2016's earnings, has partnered up with private developer Gema Padu Sdn Bhd to jointly develop three plots of land that the pair is buying from the latter's subsidiaries.

Two of the plots are situated in Dengkil, with one in Nilai on which a mixed development named Emville is in construction. The joint-venture partners are to pay RM181.2 million for the plots.

Mitrajaya will be responsible for 60% of the purchase price, which it will pay by cash (37%), construction cost of infrastructure works in Emville (35%) and a further 28% by cash on condition Gema Padu agrees to buy completed units or units under construction from the Mitrajaya Group.

Mitrajaya said the properties to be jointly developed are strategically located in the prime location of Kuala Lumpur's southern corridor development, where demand for residential and commercial development is expected to remain positive and encouraging.

The lands in Dengkil are one each for commercial land and industrial use. With the exception of one Dengkil plot measuring 21.55 acres being a freehold land, the second Dengkil plot measuring 20.15 acres and Emville's 291.7 acres are both leasehold lands.

Mitrajaya said it will fund the purchase with internal funds, adding that no liabilities will be assumed by Mitrajaya from the proposed JV.

Separately, Mitrajaya said its net profit for the fourth quarter ended Dec 31, 2016 (4QFY2016) came in at RM42.8 million versus RM24.3 million in the corresponding quarter a year ago, on higher contributions from construction and property development.

Revenue gained 10% to RM271.7 million from RM247 million a year ago, its bourse filing showed. Its directors recommended a first and final dividend of 5 sen per share in respect of FY2016.

For the full FY2016, the group's net profit grew 36% to RM117.8 million from RM86.6 million in FY2015, while revenue climbed 12% to RM964.1 million from RM861.7 million.

Going forward, Mitrajaya said its construction division will continue to drive the revenue and profit for the group in 2017 on the back of its outstanding order book of RM1.53 billion.

"The total new contracts secured in financial year ended Dec 31, 2016 was approximately RM1 billion. This division has been participating actively in various projects tender to replenish existing order book," it said.

It added that the property development division is expected to have higher contribution to the group in 2017 as the construction work progresses well for the existing ongoing project, Wangsa 9 Residency.

"The unbilled sales for this project currently stands at RM160.81 million. This division is currently looking at launching affordable homes project in Puchong Prima and a residential project in Bukit Beruntung," it said.

However, it cautioned that its South Africa investment is expected to have lower contribution in FY2017, as its remaining unsold stands are bigger plot with higher selling price.

As of closing yesterday, Mitrajaya was unchanged at RM1.25 with 788,600 shares traded, giving it a market capitalisation of RM836.5 million. — theedgemarkets.com

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