KUALA LUMPUR (June 22): Jaks Resources Bhd, whose profitability was dragged down by its loss-making property division in the financial year ended Dec 31, 2016 (FY16) and first quarter ended March 31, 2017 (1QFY17), said it would take some time for the division to start bearing profits.

Its general manager of corporate strategy Elaine Tai said the group is “trying our best” to attract the right tenants and drive traffic, particularly to its Evolve Concept Mall in Ara Damansara, Petaling Jaya, amid the challenging property market.

“The Evolve Concept Mall was opened in late-2015. So, it is less than two years old today. Generally, shopping malls take some time to reach a certain stage where it will start to generate profit. Plus, there is an oversupply situation where the retail space is concerned,” she told reporters after its annual general meeting today.

“Nevertheless, we are trying our best to bring in the right tenants to fill up the mall and to drive traffic there. With the opening of the (Ara Damansara) LRT station, it makes it more convenient for people to travel to the mall, but we are doing more to improve its occupancy,” she added.

Tai said while losses from the property division, which has been affected by the market slowdown as well as higher operating and financing expenses of the Evolve Concept Mall, will "linger for a while", the group hopes the losses will be reduced in the coming quarters.

Jaks Resources’ senior general manager of corporate strategy Steven Ang said the group maintains its intention to sell off the Evolve Concept Mall, “if the price is right” and that talks with interested buyers are still ongoing.

“The market, as it is, is very tough as shopping malls in the Klang Valley are mushrooming. Our intention [of selling the mall] remains the same... if the price is right. Discussions with interested parties are still ongoing,” Ang said.

“You can challenge the planning part, but the planning to have the mall was brought up some eight years ago, when there weren’t many malls in the Klang Valley at the time. But all of a sudden, (many other property) companies started coming up with the same product, leading to the excess supply which we see in the market today,” he explained.

Net profit contracted to RM736,000 in FY16 from RM41.47 million in the previous year, while revenue improved from RM461.18 million to RM640.38 million in the same period.

For 1QFY17, Jaks Resources recorded a net profit of RM7.54 million versus net profit of RM1.07 million a year earlier. Revenue climbed to RM154.79 million, from RM122.81 million.

At 2.50pm, Jaks Resources shares were up down 4 sen or 2.65% at RM1.47, with 1.02 million shares done, bringing it to a market capitalisation of RM718.47 million.