Hunza sees drop in first quarter results

PETALING JAYA: Hunza Properties Bhd’s net profit for the first quarter ended Sept 30, 2015 (Q1 FY16) fell 41.78% to RM4.44 million from RM7.63 million a year ago, due to a lack of new property launches and lower property sales from ongoing projects.
Revenue for the quarter fell 40% to RM31.8 million from RM53 million a year ago.
In a filing with Bursa Malaysia yesterday, Hunza said there were no new launches during the quarter while its Bandar Putra Bertam Phase 4 double-storey link houses, which saw a strong take-up last year, recorded only one last unit of sales in Q1 FY16.
Of the 172 units launched in financial year ended June 30, 2015 (FY15), more than 80% have been sold.
In addition to the lower property sales, Hunza said its operating expenses in Q1 FY16 were higher mainly due to legal fees for ongoing legal cases and higher financial expenses mainly arising from additional loan drawdown for Gurney Paragon Mall in September 2014.
Commenting on the prospects for property development, Hunza said it has just launched another 232 units of Phase 4 in Bandar Putra Bertam last month, which is expected to contribute modestly to the group’s results in the financial year ending June 30, 2016 (FY16).
“The preliminary and foundation works for the ‘green’ building super-condominiums of Alila II are in progress, and sales are expected to commence in the fourth quarter of calendar year 2015. The Juru Project is expected to take off upon approval of the revised plan by the authorities.
“The terms and conditions imposed for the initial plan is deemed not viable, hence, we submitted a revised plan. The construction of low-cost apartments, one of the major steps undertaken to relocate squatters in our 43-acre land in Bayan Baru, is progressing smoothly,” it added.
Meanwhile, the property investment segment reported revenue of RM15.6 million and pre-tax profit of RM3.4 million (after a RM4.3 million interest expenses deduction from the operational profit of RM7.7 million) for Q1 FY16 compared with revenue of RM12.8 million and pre-tax profit of RM1.2 million (after a RM3.1 million interest expenses deduction from the operational profit of RM4.3 million) in Q1 FY15.
“The increase in revenue and pre-tax profit were mainly due to higher occupancy rate for Gurney Paragon Mall and Office Tower. Indeed the Office Tower is now fully tenanted,” it said.
The group’s trading arm is mainly involved in the sourcing of materials for the group’s development and investment projects.
“The increase in revenue for trading was due to more projects namely our low-cost flats and Bertam project. However, these were low-margin products, hence leading to insignificant results,” it added.
Moving forward, the group said it will focus on constructing the latest phase of double-storey link homes in Bandar Putra Bertam and “green” building super-condominiums of Alila II.