KUCHING: Naim Holdings Bhd’s (Naim) net profit for the first quarter of 2014 rose substantially.
The property cum construction company in a filing to Bursa Malaysia said its earnings for 1Q14 jumped 133 per cent year-on-year (y-o-y) to RM95.82 million compared with RM41.16 million in 1Q13.
The company in its notes accompanying the release of the company’s financial results said the group’s profit before tax for 1Q14 increased 98 per cent to RM101.9 million from RM51.4 million due to substantial gain of RM61.7 million arising from the disposal of partial interests in an associate.
Correspondingly, its turnover for 1Q14 increased 20 per cent y-o-y to RM154 million against RM128.9 million registered in 1Q13.
Naim said it recorded higher revenue due to higher contribution from its construction segment as a result of higher progress billings of existing construction projects.
On a quarter-on-quarter (q-o-q) basis, the company’s construction division achieved lower revenue of RM75.7 million in 1Q14 compared with RM107.9 million in 4Q13 due to substantial completion of some existing projects.
Its construction segment posted higher profit of RM6 million in 1Q14 compared with a loss of RM55.9 million in 4Q13.
The company attributed the loss for its construction division in the previous quarter to a substantial provision of about RM48 million for liquidated and ascertained damages (LAD), bad debts and potential liabilities.
As for the company’s property division, Naim said its revenue increased 2.5 per cent to RM70.2 million in 1Q14 versus RM68.5 million recorded in 1Q13.
For the same period, the company said its profit for the property division also rose 46 per cent to RM26.5 million in 1Q14 against RM18.2 million registered in 1Q13.
Naim explained that the higher profit was attributed to the contribution from prior year sales as a result of increased progress of development works and cost saving reported from substantially completed projects.
The company cited that its property segment also reported new sales of about RM26 million during 1Q14.
However, on a q-o-q basis, Naim noted that its property revenue decreased by 21.9 per cent to RM70.2 million in 1Q14 from RM89.9 million in 4Q13 whilst its profit for the property segment also declined by 16 per cent q-o-q to RM26.5 million in 1Q14 from RM31.6 million in 4Q13.
The company explained that the lower profit achieved was due to less contributions from certain substantially completed projects.
On the prospects of the company’s property division going forward, Naim said, “Our sales performance continues to be sustained by solid market support in our existing established townships located in Miri which registered strong take-up rates.”
“However, we expect slower take-up rates in the newly launched products comprising high rise condominium and high end commercial units in Kuching and Bintulu.
“Aggressive marketing, competitive pricing and attractive product packages are put in place to improve the take-up rates.
“We believe, with the demand from the Sarawak Corridor of Renewable Energy (SCORE) projects, the continued growth in the current property market in Sarawak would help to sustain demand for these properties.
“As part of our long term plans, we continue to actively seek opportunities to acquire strategic landbanks within Malaysia to further strengthen the growth of the property segment in terms of sales, profit and market share.
“We remain cautious going forward, in view of the mixed outlook of property market in Sarawak for the year ahead.
“Product planning and pricing as well as tightening of costs control strategies are amongst the key measurements to be implemented in order to sustain the performance in our property segment.”