KUALA LUMPUR (Dec 3): Magna Prima Bhd is postponing its RM1.8 billion mixed development project called the "Iconic Towers" in Jalan Ampang to make way for two other upcoming projects, CEO Datuk Rahadian Mahmud Mohammad Khalil said today.
"We will concentrate on the development of Desa Mentari in Petaling Jaya and the RM1.4 billion integrated development Magna Ecocity in Shah Alam," Rahadian Mahmud said.
He said "Iconic Towers" to be built on a 2.62 acres (113,962.6 sq ft) site, formerly occupied by SRJK (C) Lai Meng), was unlikely to take-off within the next year.
“Since it will be the company’s most high-profile development, we are taking things slow and easy to make sure the project comes out perfect,” he added.
The group had completed land acquisition for the project early this year and had applied for a development order from the authorities, Rahadian Mahmud told reporters after the company's Extraordinary General Meeting (EGM) today.
The Iconic Towers project comprises two 60-storey towers, one of which is a mixture of serviced apartments, hotel and offices, while the other tower will consist of Grade A offices with Green Building index elements.
Meanwhile, Magna Prima is expected to register substantial sales proceeds from its maiden overseas property development project dubbed "The Istana" in Melbourne, Australia, next year.
He declined to disclose the amount likely to be recognised by the group.
Nonetheless, he said the gross development value (GDV) of the project is A$210 million (approximately RM600 million).
The Istana comprises a 25-storey apartment building on a 2,700 sq meter land. It will have 320 units with built-ups ranging from 403 sq ft to 4,458 sq ft. The 403 sq ft one-bedroom unit was priced from A$309,000 while a 4,458 sq ft 2-storey penthouse was priced at A$1.3 million.
When asked on the proceeds, he hinted that it would be used for the group's iconic development in Jalan Ampang and possible merger and acquisition activities (M&A).
"We have to diversify [our business and revenue] slightly as our earnings now mainly come from property development," he said.
In the third quarter ended Sept 30, 2014 (3QFY14), Magna Prima slip into a net loss of RM21.07 million from a net profit of RM5.1 million a year ago. Its revenue also weakened to RM668,000, an 87% decline from RM5.55 million last year.
For the cumulative nine months, Magna Prima's net profit fell 92.88% to RM1.39 million from RM19.49 million in the same cumulative period last year. But revenue strengthened by 13% to RM140.61 million from RM123.64 million.
In the financial year ended Dec 31, 2013, Magna Prima posted group revenue of RM135.9 million and net profit of RM14.96 million.
Magna Prima was not traded today. It closed at 89 sen yesterday, giving it market capitalisation of RM296.27 million.