Bina Darulaman Q4 profit up 84%

KUALA LUMPUR: Kedah-based property firm Bina Darulaman Bhd, which saw its net profit surge 83.6% to RM14.16 million from RM7.71 million for the fourth quarter ended Dec 31, 2015 on better margin from the road and quarry business, is banking on the launch of affordable houses to sustain its earnings in 2016.
Speaking to reporters after the company’s results briefing here yesterday, managing director Datuk Izham Yusoff said demand for properties in Kedah is still strong as there are a lot of first-time house buyers there.
“For Kedah especially, people are buying for their own occupation, so we should do quite well in terms of profit and revenue for 2016.
“Because we know what would happen this year, we have narrowed down our strategy by focusing on product offering (and that) 70% to 80% of our properties are in the affordable category (below RM500,000) and quite a lot below RM300,000,” he noted.
Bina Darulaman’s fourth-quarter revenue was down 24.35% from RM139.90 million to RM105.84 million, due to credit tightening in the property sector, which led to a slower conversion of bookings to sales.
Izham explained that the conversion period of bookings to sales has dragged longer to more than six months compared with two to three months in the past.
“The current credit tightening has impacted us, this explained why our revenue dropped. People want to buy, but it is difficult for them to get financing from the banks.”
For the full year of 2015, Bina Darulaman’s earnings fell by 0.84% from RM24.17 million to RM23.97 million. Revenue came in 26.02% lower at RM243.3 million from RM328.88 million.
Even though the property business contributed the most (45%) to the group’s topline in 2015, its profit before tax contribution was lower at 30%, with the road and quarry segment contributing some 40%.
In 2016, Izham opined that contribution from the property segment will be higher, with launches with a gross development value of RM484 million compared with RM271 million in 2015. The new launches include Bandar Darulaman, Darulaman Perdana and Darulaman Utama.
“The property sector will grow and match whatever contributions from the road and quarry business,” he opined.
Expanding beyond Kedah has always been Bina Darulaman’s plans to boost its property business. Last month, it announced plans to buy 8.6 acres of land in Kuala Kangsar, Perak.
However, Izham said the group has no immediate plan to tap into the Klang Valley market, as it is seen to be saturated.
“We’re not here to compete with the big players, but to make money. If opportunity arises, we will but there is no urgency,” he said, noting that the group has a total landbank of over 2,000 acres in the northern region.
Meanwhile, commenting on the construction segment, he said the group is bidding for jobs worth RM300 million, with its construction order book standing at RM400 million at the moment.
When asked if the political crisis in Kedah will result in changes to Bina Darulaman’s board and management team, Izham declined to comment except to say that it is up to the shareholder to decide. Perbadanan Kemajuan Negeri Kedah is the largest shareholder of Bina Darulaman, with a 67.28% stake.