Ireka Corp’s net profit eases 79.29% in 4Q2010

KUALA LUMPUR: Ireka Corp Bhd recorded a lower net profit of RM820,000 in its 4Q ended March 31, 2010, 79.29% lower compared with RM3.96 million in the same period last year, mainly due to the share loss of its associate company in Vietnam, Aseana Properties Ltd.

Revenue for the quarter, however, jumped 37.25% to RM104.6 million against RM76.212 million posted in the same period last year.

Meanwhile, for the whole year’s financial performance ended March 31, 2010, the group recorded pre-tax profit of RM9.199 million compared with RM6.973 million in the preceding year.

In a filing to Bursa Malaysia on May 27, the group said the lower prices for steel bars and other construction materials during the year have contributed to improved profit margins for construction projects.

“The results were also attributable to gains from sale of shares in Kinh Bac City Development Shareholding Corporation (KBC), offset by share of loss of Aseana Properties Ltd (ASPL), which was re-classified as an associate in the current quarter,” Ireka said.

It has also recorded higher revenue of RM393.076 million as compared with RM323.699 million for the preceding year, mainly due to the higher volume of construction works completed during the year.

During the quarter under review, the group disposed of 260,000 shares in KBC at an average net price of about VND64,230 (RM11.11) per share, bringing the total number of shares sold during the year to 760,000. A balance of 864,500 ordinary shares are available for sale to-date.

“On the construction front, basing on existing works on hand, the board expects turnover to increase in the current financial year ended March 31, 2011,” it said.

As at end-April 2010, the group’s order book stood at about RM1.02 billion, of which about RM440 million remained outstanding.

“Barring any unforeseen significant increase in the prices of construction materials, the company expects the on-going projects to continue to contribute positively to the results of the group,” it said.

“The board expects the management fee income from property development management to continue declining, due to the lower net tangible assets of ASPL, mainly as a result of the cancellation of 37.475 million shares in ASPL during 2009,” it added.

The global economic crisis has also affected the performance of real estate markets in Malaysia and Vietnam, the two countries where ASPL operates in, although the board expects conditions in both markets to improve going forward, it noted.