Brem Holdings hopeful of improvement in profitability this financial year

PETALING JAYA: Brem Holdings Bhd, which says it has a construction and civil engineering order book value of RM500 million, is hoping for “some improvement” in net profit in the current financial year, after seeing a nosedive in the last three financial years.
The group, which is involved in civil engineering and construction, property development, property investments and water supply and services, saw a sharp decline of 72.35% in its net profit for the financial year ended March 31, 2017 to RM4.75 million from RM17.19 million in the previous year.
Speaking to reporters after the group’s AGM today, its managing director Tan Sri Khoo Chai Kaa said the group is banking on its construction and civil engineering segment as well as its property development segments to propel its profitability.
“This year, I am expecting some improvement.... supported by construction and (property) development because we can see signs that it is picking up. We hope by next year we will be able to return to normal,” he added.
Khoo said the unbilled sales for its property division stands at RM200 million. In addition to that, the group also stands a 20-30% chance of securing new contracts from its overall tender book of RM100 million.
“I don’t see a problem in securing more contracts,” he said, adding that a lot of projects open for bids are coming on board.
Shortage in manpower due to policies pertaining to foreign workers, according to Khoo, has become an industry-wide bane, especially for the big players.
“For our case I think our manpower is in a manageable level,” he said.
On the property development front, while Brem has secured “some” development orders, it is also weighing the overall market condition before making a move.
In the last two financial years, property development appeared to be the main contributor for earnings, followed by civil engineering and construction.
The property development sector contributed about 23.41% in 2016 and 41.45% in 2015 to the group’s overall pre-tax profit.
However, contributions from the construction and civil engineering sector surpassed that of the property development in the first quarter of the current financial year ended June 30, 2017, spurring a 78.2% jump in net profit to RM4.66 million from RM2.62 million recorded in the same period last year, attributable to a sewerage plant construction project.
Revenue for the period more than doubled to RM84.67 million from RM36.39 million.
Khoo said the group is also on the lookout for cheap and strategically located land to acquire for its property development.