Crest Builder to focus on construction in FY19

TheEdge Thu, Jun 13, 2019 10:24am - 4 years View Original


KUALA LUMPUR: Crest Builder Holdings Bhd expects its earnings in the current financial year ending Dec 31, 2019 (FY19) to be “close” to the record level seen in FY18, when the group benefited from a slew of property launches in Shah Alam.

Speaking to reporters after the group’s annual general meeting yesterday, managing director Eric Yong said the company plans to focus on construction jobs in FY19 now that its Shah Alam property development “The Greens” is almost fully taken up.

“FY19 will not be a record year [in terms of net profit], but will be close enough to FY18’s figures. We are seeing how to drive the construction segment to compensate for the slowdown under the property segment,” said Yong.

In FY18, Crest Builder’s net profit more than doubled to a record RM70.38 million from RM28.06 million in FY17, with revenue rising 19.49% to RM595.51 million, from RM498.29 million. More than half of the FY18 bottom line came from property development.

Crest Builder’s unbilled construction order book currently stands at around RM1 billion, inclusive of RM100 million new jobs secured in the first half of 2019. The group is targeting to secure another RM500 million worth of contracts this year.

Crest Builder has suffered delays in the launches of its three property projects along Jalan Ampang and in Kelana Jaya, where Crest Builder forms a strategic partnership as a developer with the respective landowners.

The two Jalan Ampang projects — Latitud8 with Prasarana Malaysia Bhd and the project with Malaysian Rubber Board (MRB) — are at a design resubmission stage to Kuala Lumpur City Hall.

For Latitud8, the design change was to incorporate more office suites in light of the shifting demand towards smaller officer spaces. The MRB project needed to be redesigned no thanks to the alignment of the DUKE 3 Highway which took up 20% of the land parcel involved.

Similarly, the Kelana Jaya transport-oriented development (TOD) project is still at zoning and land authority approval stage. There is no issue with the project, said Yong, but it is still waiting to be gazetted in bulk alongside other projects involving landowner Prasarana.

Yong also updated that the RM400 million land swap deal in Kepong, involving the previous administration, is on hold. It would have entailed Crest Builder to develop high-rise properties on the site in exchange for strategic land parcels owned by the government.

“We are still talking to the current administration to see how we could revive [the project],” he said.

“In hindsight, [all] the delays may turn out to be positive [to Crest Builder]. The property market was on the downtrend over the last two years … There was no point launching a project during the downtrend,” he added.

Moving forward, Crest Builder has entered into the pre-qualification process in order to tender for other TOD projects with the East Coast Rail Link in Negeri Sembilan and parts of western Pahang.

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