KUALA LUMPUR (May 29): MCT Bhd’s new chief executive officer is confident that the group will continue to achieve growth despite the softer property market, as the sector still offers opportunities.
“When people tell me the property market here is still soft, I look around and see cranes all over the place constructing buildings,” said Jose Juan Z Jugo. “So, if the market is still not as strong as before, the point is that there is still growth.”
“Based on very realistic conservative assumptions, we have everything in place. As long as the market demands for our products, then we should be able to grow,” Jugo told The Edge Financial Daily.
Jugo, who assumed the CEO’s post on March 15, is hopeful that the property market will be stronger in the next one to two years, supported by improved government infrastructure.
The Philippine national, who was previously a non-executive director of MCT, took over the helm from the group’s founder, Datuk Seri Tong Seech Wi. Tong was redesignated as a non-independent executive director of the group.
Formed in 1999, MCT was listed on the Main Market of Bursa Malaysia in April 2015 following a reserve takeover of GW Plastics Holdings Bhd.
Over the past four months, even before he took over as CEO, Jugo’s team had started extending their planning horizons from a typical one year to five years — accessing opportunities that might occur five years down the road.
Under his management, Jugo believes he could bring new insights and values from a different perspective to the group to push MCT further from where it is today.
“We have to differentiate ourselves to be more compelling and I believe that we are prepared for that because we have been offering different product lines all this while. We are an integrated player; we have residential, commercial spaces, hotel developments,” said Jugo.
Going forward, Jugo said the group will continue to focus on the mass-market residential property segment in the Klang Valley, with houses priced between RM300,000 and RM700,000 per unit.
“I don’t think that we’re done with what we have to do in the Klang Valley area even after we exhaust our land banks here. I feel strongly that there will be a demand in the Klang Valley for more property developments,” said Jugo, adding, however, that the group will also seek opportunities in other locations.
Last Friday, MCT announced that its net profit for the third quarter ended March 31, 2017 dropped 73.06% to RM5.21 million, from RM19.33 million a year earlier, due to varying completion stages of project mixes sold to the market during the period. Revenue fell 8.57% to RM137.29 million from RM150.17 million.
For the cumulative three quarters, net profit fell 29.14% to RM45.56 million from RM64.9 milion in the previous corresponding period. Revenue dipped 13.11% to RM430.32 million from RM495.24 million.
“Decrease in revenues is attributed to lower movements in percentage of completion rates due to rationalised construction costs, completion and phasing as an initiative to streamline and improve operations,” MCT said in its announcement.
Jugo said MCT had been able to maintain a healthy level of unbilled sales. As of December 2016, MCT had total unbilled sales of RM1.5 billion, which he said would last for another two to three years.
MCT, which has just launched a linked townhouse project with an estimated gross development value (GDV) of about RM140 million, plans to launch three other projects, including affordable apartments and commercial developments, by the end of 2017.
The group has a few ongoing projects in Cyberjaya, including Lakefront Villa @ Cyberjaya, SkyPark @ Cyberjaya, and Lakefront Residence @ Cyberjaya, which are targeted to be completed in the next few months, by end-2017 and end-2019 respectively.
In CyberSouth, its mixed development township is expected to be completed by mid-2018, while OneCity in Subang Jaya is still undergoing a retail and hotel development.
MCT’s share price closed at 94 sen last Friday, giving the developer a market capitalisation of RM1.26 billion.
This article first appeared in The Edge Financial Daily, on May 29, 2017.
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