This article first appeared in The Edge Malaysia Weekly on June 7, 2021 - June 13, 2021

HAVING emerged from a long-standing series of losses over the past decade, property and construction outfit Majuperak Holdings Bhd (Majuperak) is confident of its turnaround plans, with its renewable energy segment driving the group’s growth this year.

The group, which is a 56.88% subsidiary of Perak State Development Corp (PKNP), had consistently posted losses for consecutive quarters from as early as September 2007, the year the company transferred its listing status to the Main Board of Bursa Malaysia.

The other two substantial shareholders in the company are Gunung Resources Sdn Bhd and KUB Malaysia Bhd, with 7.7% and 24.8% equity interests respectively.

Majuperak returned to the black in the third quarter ended Sept 30, 2020, with a net profit of RM2.2 million on the back of a revenue of RM11.97 million, compared with a loss of RM1.3 million on revenue of RM2.67 million the quarter before.

For the financial year ended Dec 31, 2020, the group posted a net profit of RM36.1 million, compared with a net loss of RM6.8 million in FY2019. Revenue was RM35.7 million, a three-fold improvement from RM8.45 million in FY2019.

In a Bursa filing, the company attributed the higher revenue mainly to the sale of 130.16 acres to Keris Properties Holdings Sdn Bhd in Mukim Sg Terap, amounting to RM12.96 million. Majuperak also derived RM1.79 million from facility management proceeds and RM529,000 from property and land rental.

Asked whether the group remained confident of posting profits in FY2021, group CEO (CGEO) Nizran Noordin tells The Edge that the company’s profitable results were due to “rigorous business review in terms of strategy and direction”.

Majuperak has been granted a one-month extension to submit its financials for the first quarter ended March 31, 2021, owing to the latest Movement Control Order.

Time will tell whether the latest board reshuffle and change in its senior management team — most of whom stepped into their new roles in the last two years — will be able to carry out and sustain the company’s turnaround plans.

The company has seen a series of boardroom reshuffles in 2018 and 2019.

Previously a private secretary to former Perak chief minister Ahmad Faizal Azumu, Nizran was appointed as GCEO on Nov 1, 2019. He replaced Mohd Ariff Yeop Ishak, 55, who had tendered his resignation as managing director-cum-GCEO but was redesignated as executive chairman, replacing Mohamed Shafeii Abdul Gafoor. Shafeii was then GCEO and executive director of Perak Corp as well as non-executive chairman of Kossan Rubber Industries Bhd.

Before that, the GCEO of Majuperak was Salween Azila Ahmad Tauffik, who resigned after five months on the job. Salween had assumed the post — which was left vacant after Rustam Apandi Jamaludin resigned on July 9, 2018 — on Oct 1 that year, after holding the position on an acting basis since Aug 15, 2018.

Rustam Apandi had previously held positions as senior vice-president (VP) of business banking at Bank Muamalat Malaysia Bhd and as VP at Malaysian Rating Corp Bhd.

Before Rustam Apandi, Datuk Jamal Mohd Aris had resigned as GCEO on March 3, 2017, after helming the company since August 2013.

While Majuperak’s core businesses are property development and infrastructure, the company has been on the lookout for opportunities in renewable energy as well as land, asset and facility management.

The company has diversified its renewable energy initiative by introducing the “Total Building Solution”, a combination of energy management, solar photovoltaic systems and co-generation as an energy solution for potential customers.

Nizran says the group has been trying to secure potential projects with government agencies under the solar incentive Net Energy Metering (NEM) 3.0 scheme in a bid to clinch as many projects as possible in Perak within the first half of the year.

“So far, we have completed two solar installations on buildings. There are three in progress and several more in the pipeline. We are confident of generating favourable and sustainable returns in the long run,” he says.

According to its 2020 annual report, Majuperak’s wholly-owned unit Majuperak Energy Resources Sdn Bhd (MERSB) posted revenue of RM1.54 million, contributing 4% to the group’s total revenue.

Nizran says its businesses in facility management and green energy solutions will drive the group’s growth this year, given the latter’s relevance and growing demand. Majuperak also hopes to offer new ideas and products in asset and facilities management, energy management solutions and IT managed services.

Through its subsidiary Majuperak Urus Sdn Bhd, the group is undertaking the facility management of 15 Klinik Kesihatan in the northern state and is identifying new opportunities in asset and facilities management in the public and private sectors.

Meanwhile, MERSB announced on Dec 31, 2020, its appointment of Modkha Marine Sdn Bhd (MMSB) to run its 34-acre kaolin mining and extraction operations in Mukim Sungai Raya Daerah Kinta, Perak, for five years.

The agreement enables MMSB to extract raw kaolin from MERSB’s site for cash at a rate of RM13.50 per tonne. With about 1,672,600 cu m (about 2,600,000 tonnes), Majuperak is expected to receive RM35.1 million over the period.

“MMSB has started preliminary work on the site, which is pending approval for the Lesen Pemindahan Bahan Mineral from the Perak Land and Mines Office. Meanwhile, mining operations will commence as soon as the licence is obtained, subject to Covid-19 standard operating procedures in Malaysia,” Nizran says.

Majuperak has a total land bank of 3,224 acres in Perak, which can be expanded by applying for more with the state government.

Majuperak acknowledges the demand for medium-cost and affordable housing and intends to cater for that market segment as well as expand its projects beyond Perak and collaborate with land owners.

“As [we are] primarily involved in the affordable commercial property segment, we do not foresee a significant impact from the implementation of the nationwide lockdown,” Nizran says.

On Jan 29, Majuperak announced its foray into the Klang Valley property sector via a 51% equity interest in Nexusbase Development Sdn Bhd (Nexus), which is currently developing Nexus Residences @ USJ Subang West. The 1.5km-radius development is worth an estimated RM125 million.

This year, the company will also launch its Affordable Home Perakku Housing Project, comprising 36 acres in Kota Malim Prima, Daerah Muallim; 22.17 acres in Changkat Rembian, Daerah Batang Padang; 19 acres in Trong Bakti, Taiping; and 4.25 acres of affordable apartments in Ulu Kinta. The projects have estimated gross development values of RM53.1 million, RM48.7 million, RM55.7 million and RM83 million respectively.

For efficient roll-out of these property projects, Nizran says Majuperak will partner with established players such as Taraf Nusantara Sdn Bhd (a subsidiary of Lagenda Properties Bhd), Berjaya Qiyam Sdn Bhd, Samsa Bina Sdn Bhd and Jati Tinggi Sdn Bhd.

“As the impact of Covid-19 persists, it could delay the progress of our affordable apartments in Ulu Kinta. Therefore, we aim to relaunch the property by early 2022. As there could also be an impact on building materials, the group is evaluating options to overcome the challenges,” Nizran says.

Other developments in the pipeline include a RM294 million mixed-use development of 226 acres on Tapah Road, in the district of Batang Padang, Perak. Its first phase is slated for completion by the first quarter of 2022 and full completion of the project is expected by end-2026.

New projects in the planning stages include affordable housing schemes worth RM197 million in Mukim Sungai Terap Daerah Kinta.

Closing at 38 sen a share last Thursday, Majuperak is worth RM105.24 million.

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