Financial Year 2017 registers drop in revenue. Group has a cash reserve of RM119.8 million and total assets of RM 802 million

BINA Darulaman Berhad (BDB) today attributed its weaker financial performance for FY2017 to lesser billings and delayed launches, but said in a statement that it was optimistic and confident of better prospects for the coming financial year with a strong cash reserve of
RM 119.8 million and total assets of RM802 million.

BDB Group Managing Director Dato’ Izham Yusoff said: “The drop in Group revenue is mainly
attributed to the property development segment which recorded a fall of 62% compared to FY2016 mainly due to lower progress billings.

The drop in revenue is also a result of continued stringent housing loan application rulings which limited customers’ access to desired funding. This resulted in many customers having to cancel their bookings.

“Many of those who went on to purchase had to make compromises by switching from earlier preferred products priced at more than RM400,000 to more affordably-priced products to facilitate successful funding application.”

For the current financial year, the Group recorded revenue of RM251.7 million compared to RM356.6 million in 2016. The Property Division recorded lower revenue of RM81.4 million compared to RM213 million in 2016.

The decrease in revenue and profitability for the year was mainly due to lower recognition of its on-going medium cost to high-end residential projects at Bandar Darulaman and Darulaman Perdana townships which were at advanced stages of development.

In comparison, the revenue and profit of the previous year was significantly contributed by land disposal. The road and quarry division recorded a 6% lower revenue of RM104.3 million compared to RM111.4 million in the previous year.

It was mainly due to lower contribution from state road and highway maintenance projects. Profit contribution has decreased from RM25.9 million in 2016 to RM14.2 million in 2017 due to higher production costs.

The Construction Division contributed higher revenue of RM55.7 million compared to RM25.6
million in 2016 and higher profit of RM4.2 million compared to RM4 million in 2016. The higher revenue and profit was contributed by SADA water treatment plant and PPR Ayer Hitam projects.

The Leisure Division contributed RM7.7 million to Group revenue compared to RM4.6 million
recorded last year. The increase in revenue was due to higher contribution from golfing activities, hotel, food and beverages and the opening of a new water theme park.

Dato’ Izham added however that the Group is now focused on strategizing for the long term and was confident that earnings are poised to pick up in the next financial year.

He said that notwithstanding the challenging business environment, the Group is confident to ride  through this period given the current land bank (worth RM344.4 million) that would sustain future development and the Group’s stable financial position as reflected by its healthy balance sheets with a strong cash reserve of RM119.8 million, total assets of RM802 million as at 31 Dec 2017 and low gearing of 0.27 times. Total equity stood at RM 515.7 million as at 31 Dec 2017.

Dato’ Izham said that the Group was optimistic that its financial performance would improve in the coming year. “Our optimism for 2018 is driven by the fact that we will have a better balance in supply of more affordably-priced properties to meet demand for the same.

Approximately 75% of products that we plan to roll out in 2018 are priced up to RM400,000, making it easier for customers to have access to their expected loan margins.

“With this better balance, we are confident that we will be able to address the issue of high loan application rejection rate and failure to obtain desired loan margin that resulted in customers having to cancel their intended purchase for higher priced products last year.

The Group’s core businesses are expected to record reasonable performance for the next financial year since the Group has adequate land bank and projects in hand.

• Road and Quarry Division is expected to remain stable based on the current demand for quarry products from Bukit Perak Quarry and Kulim Premix Plant. The division expects steady flow of income from the ongoing road and highway maintenance projects and State Road Maintenance Project
• The Construction Division will be focusing on completing and delivering all ongoing projects
within scheduled time and quality. Projek Perumahan Rakyat Ayer Hitam will continue to support the property division in developing affordable houses during the year. Prospective projects are constantly identified that will enable the division to be a key contributor to the Group.
• The Leisure Division is expected to register improved performance in the near term after the opening of the theme park. Other potential businesses have been identified to cater for a greater contribution to revenue and profits.


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