Naim Holdings Bhd gains in Q2
By:Alvin Tang

KUCHING: Naim Holdings Bhd has returned to the black with group net profit of about RM6.8 million in second quarter ended June 30, 2022 (Q22022) from loss of RM3.25 million a year ago, on significant growth in revenue.

Group turnover rose to RM80.5 million from RM59.5 million during the same period.

The company’s earnings per share stood at 1.35 sen from losses per share of 0.65 sen previously.

In the current quarter under review, Naim’s property development segment saw its revenue grew to RM27.4 million (Q12022:RM25.5 million), mainly attributable to increased work progress achieved from the on-going development projects.

The group has secured additional new property sales of RM15.1 million (RM23.1 million).

However, the segment profit has slipped to RM1.46 million (RM4.13 million) due mainly to changes in product mix sold, Naim said in notes accompanying its financials.

Reviewing the performance of its construction business, Naim said revenue in Q22022 was down to RM48.96 million (Q12022:RM69.32 million) due to lower work progress achieved on on-going construction projects.

However, the segment profit increased marginally to RM886,000 (RM759,000).

During the January-June 2022 period (6m2022), Naim recorded group net profit of RM13.7 million, a reversal from loss of RM14.7 million in 6m2021 on expansion of revenue to RM179.7 million from RM143.4 million previously.

The property development segment generated higher turnover of RM52.9 million (6m2021:RM47.4 million) while the construction segment posted sharply higher revenue of RM118.3 million (RM86.3 million).

The others segment chipped in with RM8.5 million (RM9.7 million) in revenue.

The others segment’s businesses include property investment & management, hotel and quarry operations as well as manufacture and sales of construction materials.

In 6m2022, the property development segment recorded higher profit of RM5.6 million (6m2021:RM2.3 million) while the construction segment also improved its profits to RM1.65 million (RM699,000).

The others segment remained in the red with loss of RM3.4 million (-RM3.5 million).

Naim attributed the higher revenue in 6m2022 to the 28 per cent jump in the turnover of the property development and construction segments from the same period in 2021.

During the same period, the group returned to profitability with pre-tax profit of RM17.6 million from loss of RM12.9 million in 6m2021.

The main contributor to the profits was share of improved results from associate Dayang Enterprise Holdings Bhd and its subsidiary Perdana Petroleum Bhd which contributed RM13.2 million against loss of RM15.1 million in 6m2021.

Dayang reported an unaudited after-tax profit attributable to owners of RM55.8 million in 6m2022 against after-tax loss of RM49.4 million in 6m2021 as a result of increased work orders/contracts, higher vessel utilisation, receipt of insurance claims, reversal of impairment loss on trade receivables as well as lower depreciation charges.

On prospects going forward, Naim said the group expects its property sales activities to increase gradually.

“Our primary emphasis and focus in the near term will be continuous understanding and meeting customers’ needs by building and delivering properties that are value for money in term of quality and service.

“A more cautious approach has been adopted towards new product launches (i.e. timing and size of project) and product types (including product re-design to accommodate new living trends and incorporate some environmental, social and governance elements).

“Continuous sales and marketing initiatives (such as digital marketing, various enhanced and value-added service package etc) are introduced along the way to sell off our property stocks to improve the performance of this segment and reduce associated holding costs.

At the same time, we have also closely managed and monitored the development progress and construction costs to ensure that the properties are completed and handed over to buyers on time while minimising the possibility of cost overruns and sustaining the property profit.

“As part of our medium-term plans to sustain the performance of this segment, we are also looking into various possible business opportunities to acquire new land in strategic locations within Sarawak and/or Malaysia, particularly for mass affordable housing development equipped with various facilities and amenities,” added the leading property developer. 

On its construction business, Naim said it has put in place tightened project planning, execution and monitoring to make sure construction projects are completed within the targeted schedule and to achieve the expected margin.

“At the same time, we also continuously build up and replenish our order book to sustain the performance of this segment. Nonetheless, we are cautious and selective in project tendering and focus particularly on those projects where we have proven track records and experiences, supported by current project management resources.”

Commenting on the prospects of the others segment, Naim said: “The group expects contributions from this segment to gradually improve in the near term, particularly in the retail leasing and hotel businesses.

“We will keep our rental rates competitive in order to retain tenants while maintaining a fair yield, and catering to the changing working culture (i.e. work from home culture) and rising e-commerce businesses.

“We will continuously implement various cost control measures to bring down overheads. At the same time, we have also monitored and managed collection of debts from the retail leasing business closely while providing necessary support and assistance to our tenants during this economy recovery period.”

Meanwhile, Naim said its board of directors has decided to extend the timeframe for the utilisation of the remaining RM15 million raised from the disposal by its wholly-owned subsidiary, Petrocehemical Hub Sdn Bhd of land in Bintulu for RM340 million cash in October 2020.

This un-utilised money was allocated for capital investment within 24 months from the completion of the land disposal, and has now been extended for another 24 months.

The other proceeds (RM325 million) have been fully utilised, and these include RM117 million for repayment of bank borrowings, RM90 million as dividends to shareholders, RM75 million for working capital of property development activities and RM43 million on expenses in relation to the disposal.

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