KUCHING: Naim Holdings Bhd has chalked up strong financial results in first half of 2019 (H12019), driven by higher contributions by its property and construction business. Group revenue surged to RM300.8 million from RM260.2 million in H1-2018 or an increase of RM40.6 million or 15 percent. The leading property developer returned to the black with group net profit of RM11.9 million, a reversal from net loss of RM6.93 million previously.
Earnings per share was 2.37 sen from loss of 2.92 sen. In second quarter to June 30, 2019 (Q2-2019), group revenue jumped to RM159.2 million from RM116.2 million or up by RM43 million or 37 percent while group net profit improved to RM10.2 million from RM9.2 million. On half-year performance, Naim said the improvement in revenue was contributed by a 17 percent increase in the turnover of both the property and construction divisions from H1-2018.
The higher revenue has resulted in the company posting group pre-tax profit of RM16.7 million from loss of RM2.7 million in H1-2018. The construction division has achieved increased work progress in development and construction projects while the property division has recorded higher new property sales, according to explanatory notes to Naim’s latest financials. New property sales revenue climbed to RM119.1 million from RM67.9 million.
The financial turnaround was also contributed by the share of results from associate Dayang Enterprise Holdings Bhd and its subsidiary Perdana Petroleum Bhd which registered profit of RM8.6 million from loss of RM1.8 million previously. Compared to Q1-2019, Naim said property revenue declined to RM47.5 million in Q2-2019 and the segment incurred loss of RM6.3 million from profit of RM8.6 million.
“Despite the increased development work progress, the decline in property revenue and profit in current three-month period was mainly due to the changes in product mix sold where more residential units were sold. “Nevertheless, the group managed to secure additional new sales of RM62.1 million during the current three-month period against new property sales of RM57 million achieved in the immediate preceding quarter.”
On prospects of the property business, Naim said the property market remains challenging due to increased competition, huge overhang of property stocks in the market, weak buying sentiments, strict bank lending policy and rising costs of doing business. “Our main focus remains on our existing three main flagship/integrated developments in Miri, Bintulu and Kuching. ‘We have adopted a more cautious approach towards product launches and product types, to be more selective and sensitive to buyers’ demand and market conditions.
“More medium range and affordable properties will be introduced to local market in the years to come.” On the performance of the construction division in H1-2019, Naim said revenue improved to RM193.5 million from RM177.6 million in H1-2018 while profit rose to RM10.4 million from RM6.2 million. “We continue to implement measures to improve efficiency and control costs. At the same time, we also enhanced project monitoring to ensure projects are on schedule, improve risk management system and embark on tightening of internal controls for this segment.
“With continuous efforts and resources invested to further improve our project deliverables, we will focus to complete the current outstanding order book at decent margin and within scheduled timeline. “At the same time, we are cautious and selective in project tendering and focus particularly on those projects which we have proven records and experiences, supported with current project management resources.” On property investment and trading operations, Naim said besides retail property, it would be embarking on commercial properties, for example the hotel in Bintulu Paragon for recurring income in the near term. Naim owns the hotel, which is now physically completed and set for commercial operation soon.
