GEORGE TOWN: PLB Engineering Bhd is expected to make less profits for its financial years ending Aug 31, 2015 and 2016 (FY15 and FY16) than FY14 as it slows down new launches amid cautious sentiment in the property market.
“Currently, the group is taking certain precautions in view of the soft property market, by slowing down new launches,” its executive director Ong Guat Beng told the digitaledge DAILY via email.
The Penang-based property developer and builder will also focus on the development of affordable properties from its existing land bank. “Our property development arm (PLB Land Sdn Bhd) has already initiated the affordable housing scheme. We will continue to focus on this in the near future,” she said. Ong said PLB Engineering is forecasting to post a pre-tax profit of RM5 million for the current financial year, and doubling the number to RM10 million in FY16, driven by new releases of ongoing and upcoming property developments.
However, the figures are still below its real pre-tax profit of RM19.32 million recorded in FY14. For the nine months ended May 31, 2015, the group saw its pre-tax profit plunge 74.3% to RM3.29 million from RM12.79 million, due to fewer ongoing construction and property projects.
When announcing its quarterly results for the period ended Aug 31, 2014, PLB Engineering had warned of cautious sentiment in the property market due to measures introduced by Bank Negara Malaysia (BNM) to curb property speculation, increase interest rates, and the implementation of the goods and services tax (GST). Ong said its ongoing projects namely the 98 Nibong Residences condominium project in Sungai Nibong and the final phase of its Prestige III residential project (with a RM152 million gross development value (GDV)) in Balik Pulau — both located in Penang — are expected to contribute about RM120 million in sales to the group in FY15.
She said, however, the expected sales figure is 37.5% lower than what the group achieved last year, blaming the drop on BNM’s policy to curb property speculation and the implementation of the GST.
PLB Engineering has been tasked with reviving the 18-year-old abandoned Majestic Heights affordable housing project within Taman Terubong Indah, Paya Terubong, Penang as part of a condition after it purchased 14 pieces of vacant and project land in Penang. It was reported that the project comprises 7,658 units of affordable homes with a total value of RM2.5 billion. Ong said a total of 228 purchasers from the 311 registered purchasers for Phase 2A of Majestic Heights had signed the construction agreement with PLB Engineering to revive and rehabilitate the abandoned project. The remaining 83 purchasers who had registered with PLB Engineering but have yet to sign the construction agreement are urged to show their interest latest by Nov 31.
Ong said construction work on Majestic Heights will take off in phases, starting from the first half of 2016.
Meanwhile, PLB Engineering sees its Pulau Burung waste segregation centre in Nibong Tebal, which commenced in June, to contribute RM500,000 per month to the group’s coffers from September, said Ong. For FY16, Ong said projects that will contribute to the group’s revenue include new releases from the final phase of Prestige III, a RM150 million apartment project in Zoo Road in Ayer Itam and a RM390 million affordable housing project in Paya Terubong.
This article first appeared in digitaledge Daily, on September 7, 2015.