Lower property sales and high staff costs hit Enra’s 1Q earnings

KUALA LUMPUR (Aug 18): Lower property sales and higher staff costs have dragged Enra Group Bhd’s first quarter earnings down, with net profit falling 19.88% to RM1.65 million, from RM2.06 million a year ago.

Revenue for quarter ended June 30, 2017 dropped 39.64% to RM23.95 million, from RM39.67 million, the group said in its stock exchange filing today.

Enra said the property development division saw a lower profit due to sales of inventory units of Shamelin Star, which were completed in the previous financial year.

“Management is actively marketing balance unsold units,” Enra said in a separate statement.

Shamelin Star is a mixed development project in Taman Shamelin Perkasa, Cheras, with 630 units of service apartments and 30 units of retail lots, worth a gross development value (GDV) of RM341 million.

The group said its maiden residential project located at Great Titchfield Street in London, with a GDV of RM55 million, is achieving sales targets.

“The group is confident that there will be a good take up of the units,” Enra added.

In addition, the group expects to complete disposal of its units in Holiday Plaza and Shamelin Business Centre within the current financial year ending March 31, 2018.

“This disposal would raise approximately RM85 million to repay borrowings and support the group’s operations,” it added.

As for the high staff cost, Enra has defended its move by saying it was necessary for the firm to set aside higher bonus payment and increase its staff count in its investment holdings division, which is “necessary to support the long term growth of the group”.

On the positive side, Enra noted its oil and gas division has shown a remarkable increase in profit, which was mainly contributed by higher sales in chemical products.

“Though we (Enra) are still an active property developer, we are pleased that the oil & gas services division is contributing to the group’s growth and stability of earnings,” Enra’s president and chief executive officer Datuk Mazlin Md Junid said.

“We look forward to further growth in this division and are hopeful to secure more deals in the current financial year,” he added.

Despite the dismal quarterly result, Enra said it is expecting its full-year results “to still be satisfactory and positive”.

To maximise earnings, Enra said it will continuously review its operating portfolio, which will be streamlined from time-to-time.

Shares in Main Market-listed Enra — controlled by businessman Datuk Kamaluddin Abdullah — rose 5 sen or 1.72% to close at RM2.95 today, for a market capitalisation of RM401.81 million. — theedgemarkets.com

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