Bina Darulaman posts first loss-making year since 1998

KUALA LUMPUR (Feb 20): A slash in revenue caused Bina Darulaman Bhd (BDB) to deliver a loss of RM10.42 million in the fourth quarter ended Dec 31, 2017 (4QFY17), subsequently bringing its full-year results into the red for the first time since 1998.

The developer incurred 3.43 sen in losses per share in the quarter, from earnings per share of 7.65 sen in 4QFY16. Revenue dropped 64.48% to RM54.68 million, from RM153.92 million a year ago.

The losses incurred in the latest quarter caused BDB’s FY17 results — already suffering from low profits over the earlier nine months — to plummet to RM7.81 million in losses, from RM34 million in net profit a year ago. Full-year revenue declined 29.41% to RM251.71 million, from RM356.59 million previously.

The Kedah-centric property and construction player blamed the much weaker performance in FY17 on lesser billings and delayed launches. 

In a statement today, group managing director Datuk Izham Yusoff said BDB’s property development segment suffered a 62% decline in revenue to RM81.4 million, from RM213 million in FY16, no thanks to lower progress billings.

“The drop in revenue is also a result of continued stringent housing loan application rulings which limited customers’ access to desired funding. This resulted in many customers having to cancel their bookings,” Izham said.

“Many of those who went on to purchase had to make compromises by switching from earlier preferred products priced at more than RM400,000 to more affordably-priced products to facilitate successful funding application,” he added.

BDB’s ongoing medium- to high-end residential projects at Bandar Darulaman and Darulaman Perdana townships were also at advanced stages of development, which adds to lower recognition in the segment. 

In comparison, the revenue and profit of the previous year was significantly contributed by land disposal, BDB said. Meanwhile, its leisure segment — which introduced a water theme park in its Darulaman Putra township last year — also continued the loss-making trend from FY16.

Moving forward, Izham expects BDB to have a better balance in supply of affordable housing units, with more property projects to be rolled out.

“Approximately 75% of products that we plan to roll out in 2018 are priced up to RM400,000, making it easier for customers to have access to their expected loan margins. 

“With this better balance, we are confident that we will be able to address the issue of high loan application rejection rate and failure to obtain desired loan margin that resulted in customers having to cancel their intended purchase for higher priced products last year,” Izham said. 

Izham is also confident that BDB’s position — with landbank worth RM344.4 million, healthy cash reserves of just under RM120 million and a low gearing of 0.27 times — can support a pick-up in earnings in FY18. 

Shares of BDB were yet to be traded today. It last closed at 60 sen for a market capitalisation of RM182.31 million. — theedgemarkets.com

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