Property projects to boost Fiamma FY17 performance
KUALA LUMPUR: Following a dip in profits in 2016, white goods distributor Fiamma Holdings Bhd says it is expecting its financial year 2017 performance to be boosted by its three property developments in the Klang Valley and Johor.
Fiamma is set to launch its high-rise East Parc @ Menjalara development this weekend as chief executive officer Lim Choo Hong expects an take up rate of 20% for the Klang Valley high-rise complex along with Fiamma’s KT6 landed property development in Kota Tinggi and the Vida Heights project in Johor Bharu.
“We are getting buyers but I think now the issue is with the bank loan. About 40% cannot get loans to buy so that’s why the percentage is conservative. It may take two years to sell all,” Lim said after chairing Fiamma’s annual general meeting in Bandar Menjalara yesterday.
Construction of East Parc began in July 2016 and is expected to be completed in 2020.
All three properties have a combined gross development value of RM450mil.
He expects the property sector to contribute about 20% of the company’s revenue for this year, after a sluggish 2016 which saw less than 5% contributions due to sluggish progress in getting approvals from local councils for the projects.
Coupled with a weakening ringgit that hiked costs in importing and distributing their staple consumer goods of electrical appliances, toilet, kitchen and home ware and healthcare products, Fiamma’s financial year ended Sept 30, 2016 saw a drop in revenue to RM283.8mil from the RM333mil in FY2015.
The group also recorded a lower net profit of RM23.21 mil in FY16, compared to the RM56.53 mil in the previous year.
But there is still huge potential in property, Lim said. Fiamma is still sitting on 103 acres of undeveloped land in Kuala Lumpur and Johor which it plans to develop over the next five years.
The group will continue to pursue new land banks in these two states, as it charts to continue a steady 10% annual growth.
That’s not to say Fiamma will abandon its trade and goods roots. Since 1979, it has been the distributor of several household appliances and furniture brands like Rubine, Faber, Haustern, Elba and Tuscani.
“We have a lot of new products we are going to launch in the next two months,” he said.
For starters, Fiamma will partner up with Chinese brand Arda to distribute new cooking appliances to existing customers and adding new brands to their current line up of consumer white goods.