Bina Puri eyes 20% net profit hike in FY16

KUALA LUMPUR (Jan 14): Bina Puri Holdings Bhd, which is hoping to match its 2015’s order book value of RM1 billion this year, expects its net profit to grow by 20% in the current financial year ending Dec 31, 2016 (FY16), driven by its construction and power business segments.

Its group executive director Matthew Tee (pictured) said the construction outfit is currently tendering RM10 billion worth of projects, including the Pan-Borneo Highway project worth RM2 billion, and several jobs in Petroliam Nasional Bhd’s refinery and petrochemical integrated development project in Pengerang, Johor, valued at RM1 billion.

“We are confident of securing RM1 billion worth of construction projects [this year], based on our previous track record,” he told a news conference yesterday.

“Despite a [potential] cut in contract value, the projects will still go on as usual,” he said, undeterred that Putrajaya may soon revise Budget 2016 to take into account the slump in oil prices, which have since dropped to around US$30 (RM131.40) a barrel from its initial assumption of US$48, when Budget 2016 was tabled in October last year.

Currently, Bina Puri has ongoing projects worth RM3.4 billion and an outstanding order book of RM1.89 billion, of which 87% of these ongoing projects are from Malaysia and the rest from overseas.

Tee said Bina Puri will continue to strengthen its presence in Thailand, Brunei, Indonesia and other Asean countries.

Meanwhile, Tee said the group will go ahead to list its utilities unit, PT Megapower Makmur, on the Indonesia Stock Exchange by June 30. It plans to raise up to US$4 million proceeds from the initial public offering, which will be utilised for working capital.

It first announced its intention in 2014.

“There are several private equity firms in Indonesia that have indicated their interest to take up the shares,” he said, noting that the group’s shareholding will fall from 80% to 51% post listing.

Currently, Megapower Makmur has a total of 28mw of capacity from  micro diesel-generated power plants at eight locations in Indonesia.

Tee expects the utilities business there to generate a RM4 million to RM5 million profit in FY16.

Tee also shared that Bina Puri is looking to expand its power business to reduce its reliance on its construction segment, which currently accounts for 90% of the group’s revenue.

“We are looking at acquiring a biodiesel power plant in Thailand and are identifying the location to build a hydropower plant in Sabah,” he said, but declined to elaborate further.

On the property front, Bina Puri is set to see its sales target double to RM140 million this year from RM70 million in 2015, driven by its iconic Opus @ Kuala Lumpur development.

The group has ongoing property projects worth RM3.54 billion in gross development value to be launched in phases over the next four years.

Tee also said the group had no plans to divest its retail mall dubbed “Main Place” in USJ 21, Subang Jaya, Selangor.

“Since the mall opened its door last year, we have received three [acquisition] offers, but we have rejected them all. We are still enjoying the benefit of the retail mall and [we believe] it is too early for us to sell it,” he added.

On the group’s financial performance in FY15, Bina Buri group chief financial officer Lee Tuck Wai said net profit is expected to hit RM10 million, based on the results of the first three quarters.

“In terms of revenue, it is likely to remain flat at around RM1 billion,” he added. For the nine months ended Sept 30, 2015, Bina Puri posted a net profit of RM3.76 million on revenue of RM799.87 million.

Bina Puri shares closed four sen or 9.64% higher at 45.5 sen yesterday, with a market capitalisation of RM95.4 million.

Main Place is a nice mall. Click here to check out some properties in USJ.

This article first appeared in The Edge Financial Daily, on Jan 14, 2016. Subscribe to The Edge Financial Daily here.