TALAM Corp Bhd and Kumpulan Europlus Bhd (K Euro) are taking measures, including selling part of its massive land bank, to improve their respective cashflow.
Talam, after suffering setbacks like a slowdown in construction, shortages of building materials and labour, and stop-work orders from the Federal Government, has seen its weekly sales more than halved.
“It used to be RM20mil to RM25mil a week, now it averages about RM8mil a week,” vice-president of corporate planning and strategic divisions for both Talam and K Euro, Tam Ching Wah, said after the Talam AGM in Kuala Lumpur yesterday.
Tam also said that only 30% of Talam’s current projects were active.
He said Talam planned to increase billings and sales to previous footings.
IJM Corp Bhd and Talam will be involved in 50:50 joint venture projects in Canal City in Kuala Langat, Selangor, and Sierra Ukay in Ukay Perdana, Kuala Lumpur. Another project, Sierra Selayang in Selangor is wholly handled by Talam.
IJM has also been appointed the project manager for Talam’s Puncak Jalil project in Kuala Lumpur, which is valued at RM1.12bil and currently accounts for half of the latter’s total locked-in unbilled sales.
With the IJM partnership, Talam hopes for construction to speed up and cashflow to improve.
Tan said Talam’s total projects, including those not yet launched, were estimated to be worth RM15bil to RM18bil. Its total land bank is calculated at 15,000 to 16,000 acres.
Talam reported turnover of RM175.9mil and net loss of RM19.1mil for the first quarter ended April 30.
K Euro, after selling a 1,748-acre plot in Canal City to Astaka Tegas Sdn Bhd (a joint venture company between Talam and IJM) for RM587.4mil, is halfway to obtaining RM1.06bil to fund two of its oncoming projects: a 42km highway from Shah Alam to Batang Berjuntai estimated to cost RM315mil and a RM745mil flood mitigation project for the Selangor Government. The remaining 2,552 acres are expected to be sold to other developers.
K Euro also has a concession to construct the 200km West Coast Expressway from Banting, Selangor, to Taiping, Perak. This project is awaiting approval from the Government.
With these plans, Tam said K Euro hoped to return to the black in the second half year. K Euro reported revenue of RM13.55mil and net loss of RM27.2mil for the first quarter ended April 30.
At the companies' respective AGMs, shareholders voted against a 4% dividend for Talam and 2% dividend for K Euro, in light of the present cashflow situation.
Tan Sri Chan Ah Chye, the largest shareholder in both companies, abstained from voting. Chan is also executive chairman for Talam and president and chief executive for K Euro.
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