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Mutiara Goodyear plans RM1.2b project along Jalan Sultan Ismail

KUALA LUMPUR: Property developer Mutiara Goodyear Development Bhd plans to undertake a commercial and residential project with gross development value of RM1.2 billion on the prime land it is acquiring from UDA Holdings Bhd.

The 1.4ha (3.6 acre) freehold site near the Sheraton Imperial Hotel along Jalan Sultan Ismail in Kuala Lumpur has been valued at RM215.5 million.

Mutiara Goodyear executive chairman Hamidon Abdullah said on Friday, June 10 the company planned to build offices and apartments involving a development cost of some RM800 million.

"The numbers are premature and we are undertaking the project on our own," he told reporters on Friday, June 10 after the shareholders meeting.

Hamidon said the project which have received regulators' approval since 2005, would have to be reassessed as the original plan was done in 2003.

The development cost of RM800 million which includes the price of the land, translates into a gross profit of RM400 million for the project. This indicates a gross profit margin of 33%.

In a statement to the stock exchange last month, Mutiara Goodyear said the land acquisition formed a part of the group's expansion strategy to grow its land bank in prime locations across the Klang Valley.

Hamidon said Mutiara Goodyear intended to finance 70% of the RM215.5 million price tag with bank loans while the balance 30% would be settled with the company's internal funds.

He said the commercial and residential job is expected to begin early next year for completion within five years.

On a larger scale, its current and new property projects have a combined gross development value of RM4.12 billion across the Klang Vallley and Penang, according to the company's corporate fact sheet.

The Klang Valley projects include the on-going RM1.2 billion "Nadayu Melawati" and "Nadayu  92 Kajang"  residential projects. The developer has lined up new projects in Bandar Sunway, Cyberjaya and Penang, apart from the upcoming job along Jalan Sultan Ismail.

For the current financial year ending Dec 31, Hamidon said Mutiara Goodyear planned to launch about RM1.3 billion worth of properties at Bandar Sunway, Cyberjaya, Melawati in the Klang Valley and Penang.

"It is mostly residential" he said, adding that the developer had a total landbank of 346.8ha (867 acres) of which 68.4ha (171 acres) are located in the Klang Valley while the balance is in Penang.

On whether Mutiara Goodyear plans to expand its investment properties portfolio, Hamidon said the company intended to focus on property development to grow its business.

"We will build, sell and turn cash around," said Hamidon who joined the board of Mutiara Goodyear following the takeover offer of the company by Atis Corp Bhd.

Last September, Atis Corp and its wholly-owned subsidiary Atis IDR Ventures Sdn Bhd had launched a takeover offer for the remaining shares in Mutiara Goodyear not owned by the acquirers at 97 sen a share. The takeover offer is by virtue of the Atis having acquired 44.4% or 102.63 million shares in Mutiara last year.

The level had surpassed the general offer threshold of 33% under the Malaysian corporate takeover rules.

As at April 22 this year, Atis Corp via Atis IDR is the single largest shareholder in Mutiara Goodyear with 60.8% stake.  Hamidon is also a non-executive director of Atis.

On whether Atis plans to divest its stake in Mutiara Goodyear, Hamidon said there will be no dilution in the immediate term.

Mutiara Goodyear posted a net profit of RM30.38 million, or 13.16 sen a share in the first quarter ended March 31 this year against a revenue of RM125.62 million. As Mutiara Goodyear had changed its financial year end from April 30 to Dec 31 last year, there were no comparative figures for the latest quarterly numbers.

Note that the property developer's revenue and net profit were recognised based on the project completion method. As at March 31,  Mutiara Goodyear's total deferred revenue from progress billings of its property development operations stood at RM30.4 billion.

Shareholders of Mutiara Goodyear had earlier approved the company's name change to Nadayu Properties Bhd. Hamidon said the change was expected to be effective within two weeks after obtaining the green light from regulators.

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