KUALA LUMPUR (Feb 27): Jaks Resources Bhd slipped into the red, posting net loss of RM24.03 million in the fourth financial quarter ended Dec 31, 2016 (4QFY16) against net profit of RM29.22 million a year earlier, due to losses in the property development and investment divisions.

The quarter's losses have pulled down the company's annual net profit to barely RM736,000, lower by 98.2% from RM41.47 million the year before.

The group's property development posted a substantially wider loss before tax of RM20.2 million in 4QFY16 compared with RM1.7 million in the previous corresponding quarter. The losses were impacted by competitive pricing, property market slowdown as well as higher operating and financing expenses after the opening of EVOLVE Mall.

"With the mall in full operation during the year, there was also higher depreciation charge," said Jaks in a filing to Bursa Malaysia.

The company's investment division also made a loss before tax of RM21.2 million during the quarter under review, mainly due to two reasons — an allowance of impairment of receivables of RM12.4 million, and unrealised loss of RM5.9 million and realised loss of RM2.3 million caused by foreign exchange.

Quarterly revenue was up marginally by 1.6% to RM149.32 million from RM146.93 million, mainly contributed by its construction segment, which generated RM102.9 million.

The property development division, meanwhile, contributed RM46.6 million to the group's revenue with the progress billings achieved.

"There was minimal revenue contribution from the trading and manufacturing divisions in the quarter under review as the group focused its resources on the construction and property development activities," the group said.

For the full year FY16, Jaks's annual revenue, however, climbed 39% to RM640.38 million from RM461.18 million.

Moving forward, Jaks said its construction segment is expected to perform satisfactorily as works — both domestic and those that have come on-stream from the Vietnam venture — are progressing according to schedule.

"However, the property market remains challenging on the back of slower economic downturn, due to the weaker purchasing sentiment post-GST coupled with tighter lending from banks that impact both sales of commercial and residential units of the property development division," it said.

"Barring any adverse developments, the group will endeavour to improve its present performance in 2017," it added.

Jaks shares shed 7.5% to close at RM1.23 today, valuing the group at RM552.34 million.