Tadmax's net loss widens in Q2 on marketing and energy expense

PETALING JAYA: Tadmax Resources Bhd's net loss widened in the second quarter ended June 30 to RM5.90 million from RM2.85 million in the same quarter last year, mainly due to the RM6 million marketing expense for its newly launched Mizumi Residence condominium project and expense for its energy business segment.

Revenue on the other hand more than doubled to RM26.24 million from RM9.63 million on the back of the progress made in its property development projects in Ganggarak, Labuan and the Mizumi Residence, which already has a 80% take up rate and has begun to recognise revenue.

"Barring unforeseen circumstances, the board expects the group to register losses in the current financial year considering the start up costs to be incurred by the Energy Business segment and that the revenue from the property development project known as Mizumi Residence low percentage completion envisaged with the initial commencement of the works at the project site) is impacted by substantial marketing cost that is expected to incur in the launching of the property development project," its board of directors said.

It only expects to return to the black and sustain its profitability from 2018 onwards, as higher revenue is expected to be recognised from the progress achieved in the construction of the Mizumi Residence.

The group's board of directors said in a Bursa Malaysia filing, the slowdown in the property market is still manageable for Tadmax, which is focused in the residential property market.

Mizumi Residence is expected to contribute positively to its earnings in the next few financial years.

Meanwhile, its Energy sector is only set to contribute to earnings in the year 2022-2023.

Tadmax which has been awarded the contract to develop a 1,000 MW combined cycle gas-fired power plant in Pulau Indah, has submitted the conditional requirements to the commission for the project before the stipulated due date on August 1. In line with that its board said that the business segment is progressing well.

The group's net loss for the first six months of the financial year also widened to RM9.52 million from RM5.84 million.

Revenue on the other hand, increased by more than two fold to RM38.74 million from RM15.13 million.

Tadmax shares fell by 2.5% to close at 39sen with some 182,600 shares changing hands. Its market capitalisation stood at RM 209.88million.