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Selangor Dredging has sold up to 97% of property inventory

KUALA LUMPUR (Aug 27): Selangor Dredging Bhd has sold up to 97% of its property inventory on the back of greater take-up of its developments.

At a press conference after its annual general meeting today, managing director Teh Lip Kim said the group had sold 95% to 97% of its inventory.

"We are looking to sell our current stock and inventories. We have sold 95% to 97%, so we only have a little percent left to sell," Teh said while adding that some of the group's projects have seen 70% of the units offered sold.

She added that Selangor Dredging's unsold inventory only is valued at RM110 million and that its unbilled sales account for RM250 million.

Teh added that when the group sells its unsold stock, proceeds will go to its top line.

When queried if Selangor Dredging was looking to acquire more land, Teh said the group was not in a rush to purchase more pieces of land, and it wants to be prudent and selective when it comes to future developments.

Meanwhile in Singapore, Selangor Dredging's ongoing development One Draycott will be aimed at customers from Hong Kong and Mainland China. One Draycott is located in District 10, Singapore.

In the case of its JUI Residences on Serangoon Road, District 12, the group has sold nearly 50% of the 117 apartments in the development.

In Malaysia, Selangor Dredging would be looking at properties below RM700,000 and high-rise apartments up to RM500,000 as potential new developments.

"We are still studying which areas to go into," said Teh on where the group might build its next property development.

She noted that the group currently does not have any launches planned.

Moving forward, Teh said restrictive home financing and lending from banks would be an issue the group has to contend with.

"Our wish would be for the banks to be less restrictive when it comes to home financing, as we and the banks have to work together," she said.

Teh added that while she has faith in the current government, there needed to be more stimulation — without going into specifics.

She said 10% of the group's units were sold to Hong Kong buyers and these buyers purchase smaller units that have already been completed.

Meanwhile, for its mining division, Teh said the group was looking to increase its monthly output to 30,000 tonnes for its iron ore plant in Bukit Besi Terengganu, from the current 20,000 tonnes.

She said average selling prices for FE65 iron ore are approximately US$90 a tonne.

She said the higher production of Selangor Dredging's mining segment would be based on its fast processing facility and that it is "going on smoothly".

Teh said Selangor Dredging was not looking to inject more capital into its mining segment, as the listing of its associate company Fortress Minerals Ltd on the Singapore Exchange resulted in a net gain of RM11.45 million for the group.

"We are positive about this mining segment. The business is steady given the fact there are trade wars and other factors," said Teh.

She added that the group was not looking at listing any more subsidiaries or associate companies.

Selangor Dredging general manager Loong Ching Hong said the property segment still drives the group's earnings but noted that the group's cost of production per tonne for its mining division amounts to US$40, translating into a profit margin of between 60% and 80%.

When asked about what kind of earnings Selangor Dredging would be looking at, chairman Eddy Chieng Ing Huong said the group could not give any details.

"As a policy we do not give profit or turnover forecasts, but that being said we will continue to be opportunistic and be in a strong financial position," said Chieng.

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