Iris Corp expects to return to profit in FY2016

PETALING JAYA (Sept 23): Iris Corp Bhd expects to return to profit in its current financial year ending March 31, 2016 (FY2016), after a single year of losses, its group managing director Datuk Tan Say Jim said.

“Our property development project in Papua New Guinea, projects in its core business of trusted identification division and income from its waste-to-energy incinerator in Phuket, Thailand will support the expected profit return,” Tan added

The group slipped into the red in FY15, posting a net loss of RM20.59 million against a net profit of RM23.29 million in FY2014. Revenue fell 1.55% to RM564.49 million from RM573.24 million in FY2014 reported The Edge Financial Daily today.

However, it swung back into profit in the first financial quarter ended June 30, 2015 (1QFY2016), with a net profit of RM693,000 compared to a net loss of RM2.55 million a year ago. This was despite revenue falling 13.8% to RM109.7 million in 1QFY2016 from RM127.3 million in 1QFY2015.

Tan said construction of the 290-villa project in Papua New Guinea, which has a gross development value of RM300 million, is set to start soon and is expected to be completed in FY16.

“We launched the housing project last year, but we will only begin construction until we put the financing in place, which has been done,” he told reporters after the group’s annual general meeting yesterday.

“Malayan Banking Bhd has given us a US$20 million (RM85.8 million) [loan] facility,” he added.

Tan also said the group had tendered for an affordable housing project in Putrajaya under its Koto industrialised building systems division and results on the tender would be known within two months.

For its trusted identification division, Tan said Iris had submitted proposals to two Pacific Island nations and was expecting the results in three months.

Tan added that Iris stands to benefit from the current weak ringgit, saying every 10% increase in the value of a foreign currency contributes to Iris’ bottom line.

“Our exports are either in US dollar or euro, so it (weak ringgit) is obviously good for us,” he said.

“For our trusted identification division, more than half of our revenue comes from exports,” he added.

Meanwhile, Iris saw its environment and renewable division record higher revenue of RM11.2 million in 1QFY2016 from RM9.4 million a year ago, mainly due to its 700 tonne-per-day waste-to-energy incinerator in Phuket.

“The plant in Phuket will continue to contribute to the group’s earnings in FY2016,” said Tan.

However, the group noted that its sustainable development division, food and agro-technology division, and Koto industrialised building systems division remain challenging in FY2016.

The three divisions recorded combined revenue of RM14.4 million in 1QFY2016 from RM24.6 million in 1QFY2015, due to the delay of letters of award for Rimbunan Kaseh and Sentuhan Kasih programmes, from state governments and Felda respectively.