KUALA LUMPUR: Construction company Bina Darulaman Bhd
posted losses in the fourth quarter ended Dec 31, 2017 and dragged the full year also into the red as revenue shrank sharply due to lower recognition of its ongoing medium cost to high-end residential projects.
It announced on Tuesday it posted net losses of RM7.81mil in FY17 compared with earnings of RM34mil a year ago. Its revenue fell 29.4% to RM251.71mil from RM356.58mil.
The group recorded loss before tax of RM6.5mil compared to profit before tax of RM52.3 mil last year.
Bina Darulaman said its property division recorded lower revenue of RM81.4mil compared to RM213mil in 2016. The division recorded loss before tax of RM11.9mil versus profit before tax of RM38.5mil.
“The decrease in revenue and profitability for the year was mainly due to lower recognition of its ongoing medium cost to high-end residential projects at Bandar Darulaman and Darulaman Perdana townships since most of the projects are nearing its completion.
“The revenue and profit for the previous year were significantly contributed by land disposal,” it said.
The company said the road and quarry division's revenue fell 6% to RM104.3mil from RM111.4mil mainly due to lower contribution from state road and highway maintenance projects. Profit contribution fell from RM25.9mil in 2016 to RM14.2mil in 2017 due to higher production costs.
As for the construction division contributed higher revenue of RM55.7mil compared to RM25.6mil in 2016 and higher profit of RM4.2mil compared to RM4mil in 2016. The higher revenue and profit was contributed by SADA water treatment plant and PPR Ayer Hitam projects.
For the fourth quarter of FY17, Bina Darulaman posted net losses of RM10.42mil compared with earnings of RM23.26mil a year ago. Its revenue fell to RM54.68mil from RM153.92mil.
Loss per share was 3.43 sen compared with earnings per share of 7.65 sen.
Bina Darulaman said the lower revenue and net losses were mainly due to lower contribution by the group’s property division and road building and quarry division.
It said the property division contributed RM11.4mil to group revenue compared to RM95.4mil a year ago. The division recorded loss before tax of RM10.3mil versus profit before tax of RM38.3mil a year ago.
The road and quarry division's contribution of RM25.1mil to group revenue fell 39% versus RM41.1mil a year ago. The decrease in revenue was due to lower contribution from state road and highway maintenance projects.
However, Bina Darulaman remained positive as it expected the group’s core businesses to record reasonable performance for the next financial year since the group has adequate land bank and projects in hand to provide sustainable revenue.
It said the property division expects soft property market sentiment to continue into 2018.
“The division will be focusing on clearing its unsold medium cost to high end residential projects in Bandar Darulaman, Darulaman Perdana and Kuala Kangsar. Besides clearing existing stocks, the division would continue to roll out products that match the
market requirements,” it said
As for the road and quarry division, it expected the profit contribution to remain stable based on the current demand for quarry products from Bukit Perak Quarry and Kulim Premix Plant.
“The division expects steady flow of income from the ongoing road and highway maintenance projects,” it said.
As for the construction division, it would focus on completing and delivering all ongoing projects within scheduled time and quality and it would focus on building affordable houses during the year.