PETALING JAYA: Kedah-based property and construction firm Bina Darulaman Bhd (BDB) is optimistic of better prospects in the coming financial year, with a strong cash reserve of RM119.8mil and total assets of RM802mil.
BDB registered a loss of RM7.81mil for the financial year ended Dec 31, 2017 (FY17), due to lesser billings and delayed launches.
Group managing director Datuk Izham Yusoff said the drop in BDB’s revenue from RM356.6mil in FY16 to RM251.7mil was mainly attributed to the property development segment, which recorded a 62% fall compared to FY16.
“The drop in revenue is also a result of continued stringent housing loan application rulings which limited customers’ access to desired funding.
“This resulted in many customers having to cancel their bookings,” he said in a statement.
“Many of those who went on to purchase had to make compromises by switching from earlier preferred products priced at more than RM400,000 to more affordably-priced products to facilitate successful funding application,” he added.
However, the group is now focused on strategising for the long term and Izham is confident that earnings are poised to pick up in the next financial year.
Notwithstanding the challenging business environment, BDB is confident to ride through this period, given the group’s current land bank of RM344.4mil that would sustain future development and stable financial position as reflected by its healthy balance sheet.
BDB has a low gearing of 0.27 times and total equity amounts to RM515.7mil as at Dec 31, 2017.
“Our optimism for 2018 is driven by the fact that we will have a better balance in supply of more affordably-priced properties to meet demand.
“About 75% of products that we plan to roll out in 2018 are priced up to RM400,000 per unit, making it easier for customers to have access to their expected loan margins.
“With this better balance, we are confident that we will be able to address the issue of high loan application rejection rate and failure to obtain desired loan margins that resulted in customers having to cancel their intended purchase for higher priced products last year,” said Izham.
He added that the group’s core businesses are expected to record reasonable performance for the next financial year since BDB has adequate land bank and projects in hand.
The group’s road and quarry division is expected to remain stable based on the current demand for quarry products from its Bukit Perak Quarry and Kulim Premix Plant.
The division expects steady flow of income from the ongoing road and highway maintenance projects and state road maintenance projects.
Meanwhile, the construction division will be focusing on completing and delivering all ongoing projects within scheduled time and quality, while prospective projects shall be constantly identified to enable the division to be a key contributor to the group.
In particular, Projek Perumahan Rakyat Ayer Hitam will continue to support the property division in developing affordable houses during the year.