Seacera expects flat earnings this year, major changes in 2018

SELAYANG: Seacera Group Bhd, which projects net profit for the current financial year to be flat, expects major changes in 2018, helped by the property development and construction segments.
The group, which is involved in tile manufacturing, property development and construction, saw profit plunge 98.5% to RM4.50 million from RM310.80 million.
“We think it won’t change much this year compared to last year, but we think there will be major changes in 2018,” group managing director Zulkarnin Ariffin told reporters after the group’s EGM yesterday.
The company – which bagged a RM250 million 1Malaysia People’s Housing Scheme (PR1MA) housing project in Rembau, Negri Sembilan, on Wednesday – received shareholders’ approval yesterday to acquire Duta Nilai Holdings Sdn Bhd for RM165.10 million.
The acquisition will be financed partly with an issuance of 90,000 shares for RM1 per unit and deferred cash payment of RM75.1 million.
The group in April 2016 entered into a sale and purchase agreement with the sellers, Ismail Othman and Zainab Mansor, for the acquisition, which was then valued at RM220 million. The deal was scrapped in early November last year and a fresh conditional sale and purchase agreement was established on Nov 16, 2016 between the sellers and Seacera’s outfit, Seacera Properties Sdn Bhd.
With this acquisition, Seacera will come to own a 501.50-acre landbank belonging to Duta Nilai, on which it plans to develop a township with a gross development value (GDV) of RM10 billion over 10 to 15 years.
Zulkarnin said the group is banking on the land for its future growth.
He added that Seacera has signed a non-disclosure agreement with a “big player”, whose identity he declined to divulge, to jointly develop the land.
The group is looking to roll out the project comprising medium to high-end development on the site, which is about 8km from Kajang and Semenyih town centres, in two years’ time.
Zulkarnin said the PR1MA contract award came at the right time for it to replenish its order book, as its two ongoing projects are reaching completion.
The two are a RM160 million hotel and apartment project for Koperasi Permodalan Felda and a RM14.88 million police traffic quarters project for Projek Lintasan Kota Holdings Sdn Bhd’s (Prolintas) unit, Turnpike Synergy Sdn Bhd.
Seacera’s current tender book value stands at about RM1 billion. The group has tendered for another PR1MA project in Pahang and a Perumahan Penjawat Awam 1Malaysia (PPA1M) deal.
As for its tile manufacturing segment, Seacera said it is in the midst of constructing a manufacturing and warehouse facility in Kamunting, Perak, which will see its capacity double from 6,000 sq m to 12,000 sq m.
Seacera exports its tiles to Singapore for its Housing Development Board projects. Besides that, it also exports to India, Pakistan and the Middle East.
The company received approval to acquire a RM16.9 million building and the land it is situated on in Mukim Tangga Batu, Malacca, as well as a rights issue entailing 30% of Seacera’s issued shares, through which it is hoping to raise RM74.88million.

A bulk of the proceeds amounting to RM40 million will be used for expansion of its property development and construction segment. It has also earmarked RM24.28 million for working capital expenses while RM10 million has been earmarked for the repayment of bank borrowings.