KUCHING: Jaya Tiasa Holdings Bhd
will acquire land for RM100mil to diversify into property development in Sibu, central Sarawak.
Wholly-owned subsidiary, Jaya Tiasa Property Sdn Bhd, has entered into conditional sale and purchase agreement with Yemas Development Sdn Bhd for the purchase of three residential leasehold land approved for mixed development and a parcel of vacant leasehold land for a total RM100mil in cash.
The proposed acquisition will be financed by the group’s internally generated funds.
As at June 30, 2024 (FY24), the group had cash and bank balances of RM283.2mil.
As the land to be acquired is in a strategic location within 1km from the Sibu town square, Jaya Tiasa said the proximity offers significant advantages for development in residential and commercial properties.
According to Jaya Tiasa, the vacant land is predominantly surrounded by residential properties.
The proposed acquisition provides an opportunity for the group to broaden its business portfolio as expanding into property development will enable it to add new revenue channels.
Jaya Tiasa is involved in oil palm plantation and milling operations as well as timber business that comprises logging and development of planted forest.
In FY24, the group posted revenue of RM1.02bil, out of which RM958mil was generated by the oil palm business.
“We anticipate the group will benefit from the expected growing demand for real estate in the central region of Sarawak.
“Additionally, the palm oil segment of the group is subject to fluctuations in global commodity prices which will impact the group’s revenue stability.
“Diversifying into the property development sector provides the group with a hedge against such volatility, ensuring more consistent income streams and reducing dependence on cyclical markets,” Jaya Tiasa said in a filing with Bursa Malaysia.
The company pointed out that the development cost of the land would be funded via a combination of progressive collections from property sales billings, internally-generated funds and potential bank borrowings.
In the first nine-month period to March 31, 2025 (9M25), Jaya Tiasa posted strong earnings, with group net profit up by 50% to RM187.8mil as revenue grew by 14% to RM903.6mil.
The oil palm segment generated revenue of RM845.5mil, an increase of 13%.
The timber segment also improved its performance, with revenue rising by 37% to RM53.7mil, helping the segment to narrow its pre-tax loss by 51% to RM28.1mil.
