Naim records improvement in property segment for FY16
KUCHING: Naim Holdings Bhd ( Naim) achieved an improvement in profit from RM12.1 million for 2015 to RM15.8 million for 2016 for its property segment.
The segment also recorded new property sales of about RM112 million for 2016, a welcomed result against the backdrop of the current slowdown in the property market.
Naim’s group managing director, Datuk Hasmi Hasnan said moving forward, the group would continue to focus on its three flagship developments in Kuching, Bintulu, and Miri.
“Once completed in phases between five to 15 years’ period, these three developments namely Naim Kuching Paragon, Naim Bintulu Paragon and Naim Bandar Baru Permyjaya township in Miri would yield an estimated gross development value (GDV) of more than RM10 billion.
“Except for our Sapphire On The Park condominium within Naim Kuching Paragon integrated development and part of Naim South Lake Permyjaya, Miri development which are considered higher-end products, we will be refocusing on medium and affordable residential products in the price range of RM300,000 to RM500,000, a segment which we were renowned for previously.
“We will also adopt a cautious approach towards project launches in line with market dynamics,” Hasmi remarked.
Meanwhile, the group’s construction segment suffered loss, from RM12.6million in 2015 to RM18.8 million in 2016. Factors contributing to the decline included lower contributions from projects substantially completed during 2015, increase in operational costs and various factors beyond its control such as delay in commencement of certain newly secured projects and downward adjustments to the contract sums.
On its prospects, the group’s current order book of more than RM2 billion is expected to contribute positively to its bottom line in time to come.
In addition, measures to improve efficiency and cost management and capacity building will be enhanced to improve future performance.
With works for its projects including its joint-venture project with Gamuda Bhd, the RM1.57 billion works package for the Pan Borneo Highway is progressing well, and continued strict monitoring of projects’ progress, the group is cautiously optimistic to complete the current outstanding order book at reasonable margins, within the stipulated time frame.
The group is also cautiously optimistic in securing some construction projects out of a number of sizeable tenders it participated in.
Meanwhile, works for the group’s first hotel, the nine-storey 228-room Fairfield by Marriott upscale business hotel situated within Naim Bintulu Paragon integrated development are progressing well, with expected completion and soft opening at the end of the fourth quarter of 2017 and first quarter of 2018 respectively. The hotel is also the first Fairfield by Marriott brand in Malaysia.
The group’s foray into the hospitality business is expected to contribute to the group in time to come and add value to its business portfolio.
In addition to the Fairfield by Marriott hotel, the Group has also earmarked some 90,000 square feet (sqft) of office space at Naim Bintulu Paragon in preparation for the commencement of tenancy by a major tenant.
Renovation works in respect of the office space are in progress, and works are expected to be completed in the second quarter of 2017.
The said tenancy would help create a vibrant business and retail environment at the integrated development, thereby enhancing the value of the development as a whole.
Apart from the implementation of more stringent cost management measures, the group is taking this opportunity to consolidate, strengthen its processes and procedures, retain and retrain best talents, and bringing in the best and brightest talents who may be available during periods of downturn.
The group is also reviewing some of its developments to ensure they are in line with market dynamics. Most of these measures are an ongoing exercise to facilitate continuous improvements in the group’s operations and performance.
“We are fundamentally strong. Our net tangible assets, which is a measure of any company’s strength, currently stand at a healthy RM1.3 billion. We have sizeable land bank of about 2,500 acres, most of which were acquired some 13 years ago which have yet to be developed.
“This, coupled with the support of our team of spirited and dedicated workforce whom we regard as our Valued Partners, contractors and other stakeholders will put us in good stead to weather the storms ahead,” the group said.