Magna Prima to unveil projects worth RM1.3b

KUALA LUMPUR (May 31): Property developer Magna Prima Bhd plans to launch property developments worth RM1.3 billion in gross development value (GDV) this year.

"So far, we have sales and bookings of RM977 million," CEO Datuk Rahadian Mahmud Mohd Khalil told reporters after the company AGM on Wednesday.

In another two months, Rahadian said, the company will launch phase two of Boulevard Business Park at Jalan Kuching, a service apartment project with a GDV of about RM235 million.

Magna Prima will be completing several projects this year and in 2013.

Rahadian said Seri Jalil at Bukit Jalil is slated for completion by early 2013. The guarded and gated residential development has a GDV of around RM129 million and is 53% complete, he said.

Phase 1 of Boulevard Business Park, a shop-office development, is expected to be completed by 2H13. The project has a GDV of about RM235 million and is currently 8% complete, he said.

On the company's maiden venture abroad, Rahadian said The Istana, in Melbourne, Australia, is expected to commence construction in the coming weeks with a completion target of end-2014.

The project is a 25-storey 320-unit single tower residential apartment with a GDV of A$210 million (RM650 million). About 70% of the apartment units have been pre-sold, said Rahadian.

He added that Magna Prima's Phase 1 developments at One Sierra, Selayang, Alam D'16 and its U1 in Shah Alam have been fully sold.

He said the average take-up rate for the remaining ongoing projects, including its Melbourne project, is about 80%.

According to Rahadian, Magna Prima has a landbank of around 28ha in Malaysia. He said the company is in the process of closing a land acquisition deal this year, which could add another 8ha to its landbank.

Rahadian said the company is still keen on expanding in Melbourne with a focus on commercial and residential developments. "Since we have a project there, we are very familiar with the country. I wouldn't be surprised if we continue there."

Magna Prima is not actively seeking land there, he said, but has received many proposals from agents in Australia. "We will see, we are reviewing every proposal."

Rahadian said Magna Prima does not have plans at the moment to venture out of the Klang Valley.

"The closest state that we are looking at now is Melaka because we really want to concentrate more on high traffic high growth areas [in the Klang Valley]," he said.

On the company's plans for growth after 2015, executive director (finance) Casey Choh said it will have "plenty" of cash by then and will utilise the cash to expand its landbank around the Klang Valley.

For 1QFY12 ended March 31, Magna Prima posted a net profit of RM1.02 million compared with RM926,000 a year ago. Revenue declined to RM5.3 million from RM7.1 million a year ago.

According to Choh, the company's 1Q earnings reflected the impact of the adoption of a new accounting standard (IC Interpretation 15) for the first time, under which revenue is only recognised at the time of delivery of vacant possession of a unit. Previously revenue was recognised on a percentage of completion basis.

Choh said if the new accounting standard was not adopted, the company would have posted a pre-tax profit of around RM40 million on revenue of RM76 million.

In FY11, Magna Prima posted a net profit of RM10.2 million compared to a net loss of RM12.4 million in FY10, while revenue rose by 73.4% to RM201.7 million from RM116.3 million previously.

This story appeared in The Edge Financial Daily on May 31, 2012.

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