Damansara Realty slips into the red in 2Q as sales cost, opex weigh

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KUALA LUMPUR (Aug 15): Damansara Realty Bhd slipped into the red in the second quarter ended June 30, 2018 (2QFY18) despite higher revenue, mainly due to higher cost of sales and operating expenses.

It recorded a net loss of RM0.33 million in 2QFY18, compared to a net profit of RM4.54 million a year earlier while revenue rose 11% to RM74.23 million from RM66.7 million.

For the first half of its financial year, Damansara Realty’s net profit fell 56% to RM1.41 million compared with a net profit of RM3.2 million in 1HFY17, mainly due to lower contribution from its property and land development (PLD) segment.

“The [PLD] segment recorded RM7.07 million revenue in 1HFY2018, compared with RM13.26 million in 1HFY2017. The decrease was mainly due to fewer units sold in 1HFY2018 especially from the Aliff Square 2 project in Johor Bahru,” it said.

Revenue, however, rose 24% to RM145.47 million from RM117.47 million in the previous year, mainly driven by its integrated facilities management (IFM) segment, due to higher contributions from the group's Pengerang projects and new Metro Parking contracts secured in the second half of 2017, like Dataran Maybank and Etiqa buildings, MRT stations, and the Singapore Sport Centre.

In a separate statement, its chief executive officer-cum-managing director Brian Iskandar Zulkarim said the contribution from IFM had helped the group maintain its profitability.

“We believe it is crucial for Damansara Realty to develop a diverse recurring stream of income. IFM is earmarked to bring in that recurring income which is stable and sustainable for continuous growth and we foresee that this segment will continue to drive Damansara Realty forward in the future,” he said.

Over the past year, the group has secured more than RM146 million worth of new IFM contracts and it expects the IFM segment to be the largest revenue and profit contributor for the group in the coming years.

“For our PLD and Project Management & Consultancy (PMC) segments, Damansara Realty looks forward to continuing its niche focus in hospital planning and development, project management and consultancy services, as well as construction management in Malaysia and overseas,” Brian added.

Damansara Realty shares closed 1 sen lower at 38.5 sen on Wednesday, bringing it a market capitalisation of RM122.57 million.