After 3 consecutive years of losses, the firm returns to the black with 4Q performance, mainly attributable to the IFM segment
By FARA AISYAH / Pic By ISMAIL CHE RUS
Damansara Realty Bhd is eyeing more contracts in integrated facilities management (IFM) this year as the property developer hopes to diversify its revenue stream after returning to the black last year.
Group CEO Brian Iskandar Zulkarim (picture) said the company is already bidding for two major and several average IFM works with monthly contract value from RM100,000 to RM1 million, or at least up to RM1 million-RM120 million a year.
“We are looking into two very big contracts for IFM this year and quite a number of average contracts which are less than RM10 million.
“We have established a very good relationship with Petroliam Nasional Bhd (Petronas) and are always looking for more opportunities in its Refinery and Petrochemical Integrated Development (Rapid) project.
But, we are not limiting our contracts only to Petronas,” he said at Damansara Realty’s media briefing in Kuala Lumpur yesterday.
The IFM segment contributed significantly to the company’s financial performance for its fourth quarter ended Dec 31, 2017 (4Q17), as the property developer returned to profitability after three consecutive years of losses. The company recorded a net profit of RM14.73 million for the final three months of 2017, against a net loss of RM12.59 million in 4Q16.
Damansara Realty also posted a 34.26% rise in revenue for 4Q17 to RM67.25 million compared to RM50.09 million achieved a year ago.
In an exchange filing to Bursa Malaysia yesterday, the company said the IFM contributed an 88.8% to overall group year-to-date revenue of RM249.48 million in the financial year ended Dec 31, 2017 (FY17), mainly due to the higher ongoing contracts from Menara TM, Dataran Maybank and Etiqa buildings, Mass Rapid Transit stations, Singapore Sport Centres, Senai International Airport, Kuala Lumpur Internat ional Ai rport and Pengerang projects.
The IFM segment, consisting of engineering and maintenance services, cleaning services and parking operations, recorded a revenue increase of RM52.27 million to RM221.6 million in FY17 compared to RM169.33 million in FY16.
The increase in revenue for its property development sector was due to higher contribution from Aliff Square 2 in Tampoi, Johor, and Damansara Hill 1 in Kuantan, Pahang, for FY17.
To date, Aliff Square 1 and 2 have an 80% take-up rate, while Damansara Hill 1 has a take-up rate of 14%.
Brian Iskandar said Damansara Realty has shifted its main focus to the IFM sector, and will continue to do so in the current financial year.
However, the company will continue to focus on property development, and will take a cautious approach due to the current oversupply situation in the country.
Meanwhile, Damansara Realty group COO Yahaya Hassan targets the group’s revenue and profit to rise 10% to 15% for FY18.
“The IFM sector has a few ongoing contracts for this year and next year. Although we cannot reveal the total number of projects we’re eyeing this year, it’s definitely more than what we have now.
“Combining the upcoming projects with what we already have in plan now, the number is going to be bigger,” Yahaya said.