KUALA LUMPUR (Aug 24): Property developer and restaurant operator Global Oriental Bhd (GOB) is expecting to record better bottom-line growth for its financial year ending March 31, 2018 (FY18) on the back of three upcoming projects.
“Generally, 2018 will still be slow. But we foresee that by the middle of next year, the [property] market should pick up,” GOB executive director Datuk Wee Beng Aun told The Edge Financial Daily after the company’s annual general meeting yesterday.
Nevertheless, Wee said GOB will be performing better than FY17 as its upcoming projects are strategically located. For example, its Pavillion Embassy KL and Galleria II are located near MRT stations.
FY17 was a year when Wee had expected GOB’s earnings would “not [be] very exciting” amid the slowdown in the property market, which had caused the company to defer some projects in the last two years. For example, the Pavilion Embassy KL was delayed by a year as there were many high-end properties around the KLCC area that were being launched last year.
Now, Pavilion Embassy KL and Galleria II will both be launched in September, while the Manjung Waterfront project is expected to be launched early next year.
Going forward, Wee highlighted that the company’s strategy is to look for more joint ventures (JVs).
In June, GOB announced it would be partnering Malton Bhd for a mixed development with an estimated gross development value (GDV) of RM600 million on a 38.34-acre (15.51ha) plot in Sungai Long, Cheras.
Wee said the group just submitted the development order for the project, which will be launched by the first quarter of 2018 (1Q18). He expects it to contribute positively to GOB’s earnings in FY19.
Currently, GOB has a land bank of some 519 acres, with a total estimated GDV of RM6.5 billion, which Wee said could last the group about six years. The company is still on the lookout for more land.
Under its trading arm Perwira Nadi Trading Sdn Bhd, Wee said the segment is still doing well despite the weaker ringgit. “We are still able to maintain our turnover. However, it’s making losses with the currency exchange,” said Wee.
Its trading business involves the distribution of premium brands of houseware and related products, such as Corelle, Pyrex, Visions, Snapware and CorningWare.
“I think kitchenware is a good business. Looking at the [growing] number of buildings, every house built needs kitchenware. The beauty is that there is no expiry for kitchenware,” said Wee.
As for its food and beverage (F&B) segment, Wee said GOB has sold most of its restaurant businesses, leaving GOB with some restaurants, among which are KG Korean Charcoal BBQ Buffet and The Canteen, in the Da Men shopping complex. Wee said GOB is still evaluating if the F&B business is sustainable.
GOB announced yesterday a net profit of RM524,000 in its 1Q ended June 30, 2017 (1QFY18), against a net loss of RM13.74 million a year earlier, due to higher other operating income and lower operating expenses. It was its 4th consecutive profitable quarter — albeit the most modest one — after falling into the red in 1QFY17.
This article first appeared in The Edge Financial Daily, on Aug 24, 2017.