Selangor Dredging plans to refocus on Singaporean property segment

KUALA LUMPUR: Selangor Dredging Bhd (SDB), which has received shareholders’ approval to dispose of Wisma SDB on Jalan Ampang here for RM480 million, will be refocusing on the Singaporean property segment in the next six to 12 months.
With two projects with a total gross development value (GDV) of RM900 million lined up across the straits, the group views the Singaporean market as being very “investment buoyant”.
The two apartment projects are to be developed on the recently acquired 17,422 sq ft land in Draycott Park, via its 50%-owned associate company Chamspworth International Pvt Ltd and another land measuring 31,735 sq ft on Serangoon Road.
Contributions from the Singapore operations where the group focuses on property development amounted to RM24.09 million of SDB’s total revenue of RM220.50 million, in the financial year ended March 31.
In 2016, the group completed a 148 unit development named Village in the west coast of Singapore.
Property development contributes about 80% to the group’s revenue and the total GDV for its projects in Malaysia until the next AGM in 2018, is around RM600 million.
The group will be developing a residential project which comprises 316 units known as UNA in Jalan Peel, while projects such as The Hub in SS2 Petaling Jaya and SQWHERE in Sungai Buloh are under construction.
Domestically, the group is also looking to sell its existing stocks from development projects.
“Our main focus in the coming year will be to sell what we already have,” SDB managing director Teh Lip Kim told reporters at a media briefing after the group’s AGM on Friday.
With land in prime locations in Penang and the Klang Valley in its possession, the group is also on constant lookout for opportunities to acquire land, to expand its existing landbank of 55.19 acres.
Teh told reporters that the sale of Wisma SDB is a step in the right direction, as it will enable the group to pare down its borrowings of RM248 million and save some RM13 million in cost, which is almost on par to its net rental collection of RM14 million.
The group which saw a dip in net profit for the first quarter of the current financial year ended June 30, to RM3.03 million from RM4.60 million is expecting its earnings to be underpinned by gains from the sale.
Besides that, the group recently acquired a 22% equity interest in Webcon Mining Sdn Bhd, a company which is involved in mining, extraction, excavation and sale of iron ore in Bukit Besi, Terengganu.
The group is banking on Webcon’s mining lease of 15 years and production guarantee of six million tonnes of iron ore, to see some returns from its investment as the company’s first bulk of income is expected early next year.
“We wanted to invest in companies where the cost is in ringgit but the sales is in US dollars,” Teh said.
SDB did not rule out the possibility of enlarging its shareholding if there is an opportunity.
The group said it is adapting an “opportunistic approach” to its investments citing the potential, the iron ore mining industry poses, catalysed by the increasing demand for steel.
SDB’s shares gained 1.79% to close at RM1.14 with some 77,000 shares traded, bringing its market capitalisation to RM477.26 million.