KUALA LUMPUR: Builder and property developer Ekovest Bhd, controlled by tycoon Tan Sri Lim Kang Hoo and Datuk Haris Onn Hussein, the brother of Defence Minister Datuk Seri Hishammuddin Hussein, plans to launch five projects with a combined gross development value (GDV) of over RM4 billion over the next 10 years.

Included in this development period is its ongoing RM1.63 billion EkoCheras, a mixed retail and residential development on 11.98 acres (4.8ha) of land in Jalan Cheras.

Managing director, Datuk Lim Keng Cheng (pic), nephew of Kang Hoo, said the group plans to launch five projects in Kuala Lumpur, starting from the fourth quarter of this year.

They are EkoTitiwangsa with a GDV of RM507 million, EkoQuay (RM208 million), EkoGateway (RM2.79 billion), EkoPark Place (RM323 million) and EkoAvenue (RM186 million).

The 2.91-acre EkoTitiwangsa in Jalan Pahang, slated for launch in 2018, will feature retail shops and serviced apartments.

EkoQuay, also located in Jalan Pahang, will be launched next year. Spanning 2.13 acres, it will comprise retail lots, serviced apartments and a hotel.

The development of EkoPark Place and EkoAvenue, both in Jalan Pahang, sits on 1.38 acres and 1.10 acres of land, respectively. Featuring a block of 33-storey Grade A offices, EkoPark Place will be launched next year, while EkoAvenue, which consists of retail shops and serviced apartments, will be launched in 2019.

The 14.5-acre development of EkoGateway in Setapak, meanwhile, features serviced apartments, a shopping mall and a hotel, and is expected to be launched next year.

Currently, Ekovest’s land bank in the Klang Valley, Johor and Pahang stands at 34 acres, 25 acres and 12 acres, respectively.

Keng Cheng said the group has no plans yet to develop its land in Kuantan, but will focus on property development in the Klang Valley first.

He said that the construction division will continue to be the core of the group’s revenue. The segment currently contributes 60% to the group’s total revenue.

Ekovest’s total contract value currently stands at RM2.41 billion, while its total outstanding order book is RM2.27 billion, of which RM1.44 billion are external.

Some of its key current projects include the improvement and beautification works at Precinct 7, Putrajaya with a contract amount of RM130 million, the Phase 2 development of its toll highway (RM1.18 billion), widening of the PLUS Highway (RM153.3 million) and the River of Life (RM22 million).

On its toll business, Keng Cheng said the group targets a 30% contribution to the group’s revenue by the next financial year ending June 2015 (FY15), from 10% currently.

“We recently consolidated our toll operations through the acquisition of a 30% stake in the Duta-Ulu Kelang Expressway (Duke) from Malaysia Resources Corp Bhd for RM228 million in January. This gives us full ownership of the 59-year concession until 2059 and should contribute positively to our earnings,” he added.

For FY14, Ekovest’s net profit dipped 6% to RM47.08 million from RM50.07 million in FY13 on high finance cost of its toll operations which ballooned 10-fold to RM201.63 million from RM19.14 million.

Revenue, however, soared 62% to RM228.83 million from RM140.97 million as the group completed the consolidation of its toll operations early this year, which saw the latter’s contribution increased to 39% from 10% previously.

Pre-tax loss for the toll business increased 18-fold to RM124.43 million in FY14 from RM6.92 million in FY13, even though revenue leaped six-fold to RM89.41 million from RM14.65 million.

“Profitability is not something that can be estimated in the immediate term as there are various challenges of managing a highway. However, with the consolidation exercise and growth in traffic volume, we are expecting toll operations to perform substantially better,” Keng Cheng.

Ekovest has started Phase 2 of Duke, which entails the construction of an elevated highway that will complement the existing expressway.

“Construction progress is at 17% and we are on track to meet our timeline to complete it by end-2016,” he added.

Meanwhile, Keng Cheng deemd the group’s gearing level of 1.7 times as “still sustainable”. The bulk is derived from the combined RM2.48 billion sukuk and junior bonds issued late last year.

“As for borrowings and additional project financing, we do not foresee any need to do so at the moment,” he said, adding that the group has weathered turbulent times and has remained profitable since inception.

Ekovest’s total assets and liabilities stand at RM3.42 billion and RM2.31 billion, respectively. Its cash and cash equivalent totals RM20.5 million.

This article first appeared in The Edge Financial Daily, on September 29, 2014.