KUALA LUMPUR: Fiamma Holdings Bhd is targeting to raise revenue contribution from its property development segment to 20% for the financial year ending Sept 30, 2017 (FY17).

In FY16, the segment only contributed 2.3% of the RM283.81 million revenue recorded.

Fiamma chief executive officer Jimmy Lim Choo Hong said the segment’s contribution this financial year will be driven by three projects that carry a collective gross development value (GDV) of RM450 million.

These projects are: the East [email protected] serviced residences development situated between Desa ParkCity and Kepong with a GDV of RM320 million; Vida Heights serviced apartments with retail space development in Johor Baru, which has a GDV of RM100 million; and some double-storey terrace houses and shops in Kota Tinggi which carry a GDV of RM30 million.

“Last year, we had a few hiccups in our property development segment, as we had to wait for approval from local authorities for both our developments in Kuala Lumpur and in Johor. That is why the segment was not a main revenue contributor last year,” he told reporters after the group’s annual general meeting yesterday.

He added that difficulty in obtaining financing from banks for potential homebuyers proved also a hindrance to the group’s property development segment, with some 40% loan rejection rate by banks among its potential homebuyers for the East Parc property.

“[Nevertheless] we saw a lot of interest from buyers for East Parc since its soft launch [and] we will be having our full launch this weekend,” said Lim.

The group’s undeveloped land bank, both in Kuala Lumpur and Johor, currently stands at 103 acres (41.68ha) with a GDV of approximately RM1.5 billion.

As for its trading and services segment, the group is expecting a 10% growth for the segment this year, in line with the historical compounded annual growth rate from FY07 to FY16.

“Our strength lies in our brand, our name and our strong distribution network, and our multi-brands approach allows [us] to not focus too much on just one brand or product.

“We will be adding a new cooking appliance brand called Arda from China to our portfolio next month, but this will be an agency brand and [not an in-house brand],” he said.

Meanwhile, Lim said that the weak ringgit poses a challenge for the group due to the higher import costs involved.

“Approximately 50% of our [import] costs are [denominated] in yuan and [almost] 50% in US dollar, so this impacts the pricing of our products.

“This is not just something that impacts us, but [our competitors] as well as most brands, including us, have adjusted prices upwards for most home appliances, by [as much as] 10% this year,” he said.

Some in-house brands which Fiamma carries are Elba, Faber, Rubine, Tuscani and Haustern. The company is also the sole distributor of brands like Whirlpool, Braun, Beurer and Omron.

For the first financial quarter ended Dec 31, 2016, Fiamma reported a 40.3% rise in net profit to RM3.6 million from RM2.57 million a year ago, as revenue grew 10.4% to RM69.27 million from RM62.72 million, on higher contribution from both its trading services and property development segments.