by IZZAT RATNA
DAMANSARA Realty Bhd is embarking on phase two of its strategic restructuring plan (SRP) to return to profitability in the financial year ending Dec 31, 2017 (FY17).
The property development and integrated facilities management (IFM) company, which has been in the red since FY16 due to the sluggish property demand and stringent lending policy by banks, is en route to restructuring its non-property operations.
CEO Brian Iskandar Zulkarim said the company is banking on higher contributions from the property division to propel growth in FY17 on the back of upcoming commercial launches in Kuantan, Pahang and Johor Baru, Johor.
“We are now in the planning stage for commercial development for a plot of land in Damansara Hills Kuantan, as well as a similarly themed project in Johor Baru. The upcoming launches are slated for launch by the end of this year or second-quarter of 2018 (2Q18), depending on market conditions,” he told reporters at a media briefing in Petaling Jaya yesterday.
Currently, IFM contributes 60% in revenue, while the remaining 40% is from the property segment, he said. Net loss narrowed to RM1.34 million in 1Q17 from a net loss of RM3.86 million in the same period a year ago. For FY16, the company recorded a wider net loss at RM27.12 million against a net loss of RM4.38 million a year earlier.
Brian Iskandar said the firm is moving towards phase two of its SRP as an effort to increase transparency in its business outlook and prospects.
“The SRP is an ongoing process as change and transformation takes a long period of time, therefore, there is no definitive timeframe for the transformation period,” he said.
“When you talk about transformation, the end goal basically leads to organisational and cultural behavioural transformation, which involves values, alongside a much more positive bottom-line growth,” he added.
He said Damansara Realty had concluded phase one of the SRP, where the emphasis was to fix the company’s business core.
He said the company is also planning to venture outside its predominant market place, Pahang and Johor, to acquire more landbank in other key states within Malaysia.
“We will weigh our options for expansions in land acquisitions for development should we have the muscle and financial backing to do so. Nothing concrete has been finalised yet as the main priority is to stabilise our balance sheet for a turnaround in FY17 and FY18,” he added.
Damansara Realty has about 222.58ha of land concentrated in Kuantan, excluding the 60.7ha of land in Country Gardens and Central Park, Johor.
Commenting on the influx of Chinese property developers to the market, Brian Iskandar said local players need to consider partnering foreign players that have strong financial backing in order to remain competitive in the market.
“Developers also need to ensure their product placement and target audience cater to market needs and demand as this would contribute significantly in their financial performance.
“When Chinese developers come in, they enter with strong cashflow, expertise and skills,” he added.
Key subsidiaries under Damansara Realty’s property and land development are Damansara Realty Johor Sdn Bhd and Damansara Realty Pahang Sdn Bhd. Its IFM subsidiary is TMR Urusharta (M) Sdn Bhd, which focuses on engineering-related facilities management.