Gabungan AQRS eyes return to profit in FY16

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KUALA LUMPUR (June 2): Gabungan AQRS Bhd, which slipped to a net loss of RM9.89 million in the last financial year ended Dec 31, 2015 (FY15), expects to return to profit this year on the back of a solid construction orderbook of RM700 million and new contract wins in the near term.

"We hope to grow our orderbook to RM1.5 billion by the end of the year from RM700 million currently," its chief executive officer Datuk Azizan Jaafar told reporters after the group's annual general meeting today.

He said the group is still waiting to receive a letter of award from the federal and Pahang state governments for the construction of a new Pahang administration complex in Kota SAS, Kuantan, worth RM422 million.

"The federal and Pahang governments are working together to finalise the terms of the agreement," he said, adding that the contract award will be announced soon.

Azizan also expects tenders for the Light Rail Transit 3 (LRT 3) project linking Bandar Utama to Klang will be called in the third quarter of this year by Prasarana Nasional Bhd, with the winners to be announced by year end.

Gabungan AQRS is also participating in the tenders for the construction of the Sungai Besi-Ulu Klang Elevated Expressway and the Damansara-Shah Alam Elevated Expressway.

In Sabah, Azizan noted that the group is eyeing to secure jobs from the Pan Borneo Highway project via its Sabah-based 49%-owned associate Sedco Precast Sdn Bhd.

In its property development segment, Azizan said the group will focus on the affordable housing segment, adding that a "major announcement" will be made in the second half of the year.

"We will venture into property projects through joint venture arrangements or partnerships instead of doing it on our own," he added.

Meanwhile, earnings contribution from the group's mixed development in Sabah known as the "One Jesselton Waterfront" with Suria Capital Holdings Bhd will start from FY16.

"We are now waiting (for) Suria Capital to issue the (land) title for us to embark on the project," said Azizan.

Its outstanding sales of RM130 million for its Permas Centro shop offices in Johor and Contours Courtyard Villas in Ulu Klang, Selangor, will also be realised this year.

Gabungan AQRS has remaining gross development value of about RM660 million, including the remaining phases of The Peak luxury condominium development in Johor Bahru City Centre.

With all these projects in the pipeline, Azizan said Gabungan AQRS's earnings visibility will improve from this year onwards.

The group posted a net loss of RM9.89 million in FY15 compared with a net profit of RM52.95 million in FY14, as its property development business was hit by sales cancellations as buyers could not secure financing.

In the first quarter ended March 31, 2016 (1Q2016), its net profit fell 39% to RM3.75 million from RM6.12 million a year ago on lower revenue from its construction division.

At 11.32am today, Gabungan AQRS shares traded unchanged at 95.5 sen, with 30,000 shares done. Its market capitalisation stood at RM372.91 million.