Naim’s property new sales grew better than expected
KUCHING: Naim Holdings Bhd’s (Naim) property segment achieved total new sales of about RM93 million for the nine months ended September 30, 2017, as compared with RM86 million for the corresponding period last year.
“Despite the challenging business environment, we have managed to achieve to date, about 80 per cent take-up for our Naim Sapphire Classic affluent condominium in Kuching, and average take-ups of about 60 and 65 per cent for our Naim Bintulu Paragon and Naim SouthLake Permyjaya, Miri development respectively, with these projects being at various stages of completion,” the group said.
However, the Group’s Construction segment took a beating, registering a loss of about RM77 million despite registering higher revenue of about RM160 million.
“The decline in our Construction segment was mainly due to losses and loss provisions in the sum of RM107 million for two projects which may be involved in mediation or arbitration. These provisions were made based on our prudent and conservative estimation of claims negotiation status with the client, despite supported grounds on such claims by external claims expert,” the Group explained.
Meanwhile, the contribution from the group’s associate, Dayang Enterprise Holdings Berhad (Dayang) also deteriorated from a profit of RM2.4 million last year to a loss of RM25 million in the period under review.
The Group regards its dip as a temporary setback and remains cautiously optimistic in weathering the storms ahead.
“We have come a long way and have been through various challenging times in the past. We aim to return to operational profitability next year, backed by strong unbilled sales of RM96mil and strength of our construction order book of RM2 billion. However, this would depend on the economic situation, in particular, the speed of recovery of the property market, as we would be banking on the property segment to support us through the not so good times.
On the property front, we would continue to focus on our three flagship developments, namely Naim Kuching Paragon, Naim Bintulu Paragon and Naim SouthLake Permyjaya, Miri. We will also be realigning our product mix, to comprise 30 per cent high end products and 70 per cent medium end products.
For the construction segment, we will continuously pursue the recovery of the claims with the backing of independent assessment by external claims consultant. With continuous efforts and resources invested to further improve our project deliverables, we remain cautiously optimistic to complete the current outstanding order book at decent margin and within scheduled timeline. At the same time, we are selective in
tendering for project and will focus on those where Naim has proven track record and experience, to be supported by current project management resources.
“We are still fundamentally strong. Our net tangible assets, which is a measure of any company’s strength, currently stands at a healthy RM1.2 billion. We are also primarily an asset-based company, with some sizeable land bank which would allow us to sustain for the next 20 years, depending on market conditions.
“These, coupled with forward looking business strategies, talent development and retention, strict cost management and continuous innovation will put us in good stead and make us stronger, in preparation for the better times to come as they surely would,” the group said.