MyEG expects hostels to generate big profit

A MyEg service counter. - Filepic

PETALING JAYA: MyEG Services Bhd said its venture into the business of providing hostels for foreign workers could contribute more than a quarter of its future net profit.

The group has a long-term target of opening up to 200 such sites in Malaysia.

“The board proposes to seek the approval of the shareholders of the company for the diversification,” it said in a filing with Bursa Malaysia yesterday.

It said that the proposed diversification complements the group’s existing foreign workers permit renewal business.

Last year, the company established 55% owned MYEG Lodging Sdn Bhd to build, own and operate hostels for foreign workers. It had secured projects to provide such services from the Melaka State Development Corp and Johor Corp.

“MYEG Lodging has leased three sites in Melaka to operate as hostels, of which two sites are in operation and the remaining one expected to commence operations in financial year ending June 30, 2018.

“MYEG Lodging has also leased a piece of land in Johor Baru and is in the planning stage to set up two blocks of hostels,” it said.