KUALA LUMPUR: Property developer Symphony Life Bhd, which has issued a profit warning for its current financial year ending March 31, 2016 (FY16) as it grapples with slower demand, may only move ahead with its planned RM8 billion integrated township project in Sungai Long in 2018.
Expectations were high that it would go ahead with the project on the 170ha land there — a tract deemed as the jewel in the crown for the mid-sized developer —after the state government finalised the land acquisition for the proposed East Klang Valley Expressway (EKVE) last week.
Recall that Symphony Life had held back development on the land since 2012 due to the potential land acquisitions by the state government for the Langat 2 water treatment plant and EKVE.
Yesterday, Symphony Life chief financial officer Hazurin Harun told reporters after the group’s annual general meeting that Symphony Life is putting the project on hold for now as it wants to wait for more details on the design of the EKVE to integrate the development with the expressway.
He said the EKVE took some 9ha off its land, leaving the group with about 161ha.
He also said the planned acquisition for Langat 2 there has been put off. “We were told they will not acquire the land."
Symphony Life acquired the piece of land for RM137.4 million in 2012, for which it intends to develop into an integrated township comprising landed and strata-titled residential and commercial units.
Meanwhile, chief operating officer Stewart Tew warned that Symphony Life's performance for FY16 would be worse than FY15 due to the softening in the property market.
Asked if the company will slip into the red, Tew said “hopefully not”.
The softer market also prompted the group to hold back part of its RM2 billion worth of real estate launches in the Klang Valley this year to focus on existing projects.
Among the deferred launches are projects in Bandar Sunway and Puchong, Selangor, which have been postponed until next year or 2017.
"Many existing projects are at the foundation stage. We can only realise the contribution next year (FY17)," Tew said.
The group is also actively on the lookout for new land bank for future developments.
Symphony Life's unbilled property sales stood at RM700 million as at June 2015, which could support the group's income for the next four years, said Tew.
In FY15, Symphony Life’s net profit fell 18.7% to RM41.81 million from RM51.45 million in FY14 on lower revenue, which slipped 26.7% to RM286.78 million from RM391.19 million in FY14.
In the first quarter of FY16 (1QFY16), net profit fell 81.5% to RM2.04 million from RM11.01 million a year ago, while revenue halved to RM40 million from RM82.73 million.
Shares in Symphony Life closed 0.5 sen or 0.67% at 75 sen, after some 504,100 shares changed hands. At 75 sen, its market market capitalisation stands at RM232.23 million.
This article first appeared in digitaledge Daily, on September 10, 2015.