OCR aims to be back in black in 2017

PETALING JAYA: Loss-making O&C Resources Bhd (OCR) expects to break even in the financial year ending July 31, 2017 (FY17) before returning to the black in calendar year 2017, driven by its property and construction businesses.
 CFO Bernard Tan Ban Tatt said OCR has a construction order book of RM130 million and it has tendered for RM1 billion worth of 1Malaysia Peoples’ Housing programme (PR1MA) construction projects.
“We have quite a number of projects in hand, it should contribute positively to the group (for construction),” he told reporters after its AGM here yesterday.
Tan said OCR expects to derive 60% of its revenue from the property and construction segments and the remaining 40% from the manufacturing and trading segments in 2017.
Currently, 15% of its revenue is from construction. The rest is from manufacturing and trading, where the group is engaged in the manufacturing of condoms, baby products and molds; as well as the trading of rubber products, baby apparels, infant milk formula and toiletries.
OCR is expected to launch about RM636 million worth of properties in 2017, including a residential or mixed development project at Jalan Yap Kwan Seng, a mixed development project in Kuantan and a joint venture property project in Pahang.
It is also expected to commence construction works for a PR1MA project in Malacca (RM101 million GDV) next year, as well as start a project management consultancy job for Yayasan Pahang for an affordable housing development scheme in Pahang consisting of 25,000 units of residential properties.
“We’re still tendering for PR1MA and SPMB (Syarikat Perumahan Negara Bhd) projects. We’re also working with some universities to do hostel projects,” said Tan.  
He added that OCR will look at affordable housing and government projects that will enable the group to realise its earnings faster.
“But at the same time, we also look at good locations where demand for certain products is still there, such as our project in Jalan Yap Kwan Seng.”
He said the weak ringgit will make its property at Jalan Yap Kwan Seng more attractive to foreign investors.
OCR posted a net profit of RM288,000 in the first quarter ended Oct 31, 2016, 32% lower than RM423,00 a year ago, mainly due to the increase in administrative costs in the quarter.
But its revenue jumped 13% to RM11.96 million compared with RM10.54 million in the previous year due to increase in progressive recognition of revenue from the construction business.
OCR, formerly known as Takaso Resources Bhd, have suffered losses for over a decade. A year ago, it diversified into property and construction as part of its turnaround plan, following the entry of mid-sized developer OCR Land Holdings Sdn Bhd, which now holds a 13.13% stake in OCR.