MKH sees RM1b sales for FY15

KAJANG: MKH Bhd is estimating sales of close to RM1 billion for the next financial year ending Sept 30, 2015 (FY15), compared with RM800 million it is expecting for FY14.
As it enters the last quarter of FY14, MKH group managing director Tan Sri Eddy Chen Lok Loi (pix) told SunBiz that the property developer expects to perform better in FY15 than FY14. In FY13, it registered RM580 million in sales.
"We're looking at another 13 to 15 launches in FY15 because some existing projects will be launching the subsequent phases," he said in an interview recently, adding that these launches consist of residential and commercial projects.
He said these upcoming launches include the second phase of Kajang 2 (bungalow and condominium units), the third, fourth phases of Hillpark Shah Alam (including new commercial project), as well as new phases of Pelangi Heights in Mantin.
MKH is on track to achieve its FY14 sales target of RM800 million, having reached RM380 million for the first half of the year.
"As some launches were delayed, we expect some spikes in sales (in the second half of the year)," added Chen.
He said MKH has over 1,000 acres that are not yet developed in the Klang Valley, which will be planned for residential and commercial projects. He added that MKH will stay focused in the Klang Valley and is currently not looking at other locations for development.
"Klang Valley is still the growth area. The government wants to increase the population in Klang Valley from 6 million to 10 million, so there are a lot of houses to build. That will keep us busy for the next seven to 10 years," said Chen.
He said MKH will maintain its contribution from the property investment business, which makes up about 10% of the group's income.
"As our income grows from property development, this property investment portfolio will also grow. If opportunity arises, we can increase (the contribution from property investment to above 10%) but at the moment, our property development side is growing quite fast, and is faster than property investment, which also takes time to build. Even if we start (a new property investment) now, will take three to four years before we can recognise those incomes (from property investment)," said Chen.
Meanwhile, Chen said MKH is looking at more than doubling its plantation landbank within the next two to three years. Its current plantation landbank spans over 16,000ha in Indonesia.
"Plantation and property are going to be eventually two core businesses (of MKH). Both will continue to do well because we have affordable housing that will meet the market demand, while plantation is a food business that will see bullish growth as people consume richer food."
This year, it expects crude palm oil prices to range between RM2,600 to RM2,700 per tonne. This is in anticipation of the El-Nino phenomenon that will see a fall in production but will in turn hike up CPO prices to compensate for the reduction in volume, said Chen.