Fajarbaru targets firm double-digit growth from FY2017

KUALA LUMPUR (July 28): Fajarbaru Builder Group is targeting a firm double-digit growth in its earnings and revenue starting from the financial year ending June 30, 2017 (FY17), driven by upcoming property launches and strong unbilled order book from its construction segment.

The construction player, who diversified into the property sector last year, intends to undertake three residential development projects in the country with a projected total gross development value (GDV) of RM728 milllion.

Its current unbilled order book stands at RM450 million, which will keep the group busy for at least the next two years.

Fajarbaru's executive director Ooi Leng Chooi said the three residential projects in the pipeline are: a condominium in Bandar Kinrara, Puchong (RM400 million GDV); a serviced apartment in Sentul (RM250 million GDV); and serviced apartments in Pulau Melaka (RM78 million GDV).

"We will be launching our Puchong project by end of this year, followed by Sentul and Pulau Melaka, which will be launched in the first quarter and third quarter of 2016, respectively," he added.

Ooi said the group will also likely start recognising contributions from its maiden overseas property project, the "Gardenhill Condominium" in Melbourne, by end of next year or early 2017.

"We are also on the lookout for new landbank in Klang Valley and Penang for future projects," he told reporters after the signing of a funding agreement between Fajarbaru Properties Sdn Bhd and Malayan Banking Bhd.

Ooi said the agreement signed was to formalise the lending of an undisclosed sum from Maybank to Fajarbaru as funding for the Melbourne project.

The Melbourne project, which has a GDV of A$77 million (RM214.93 million) is being developed by Fajarbaru-Beulah (Melbourne) Ptd Ltd, a joint venture between Fajarbaru Properties Sdn Bhd (51% stake) and Beulah International (49%).

Fajarbaru-Beulah executive director Chan Jiaheng, who was also present, said some 80% of the condominium’s 136 units have been taken up.

He said construction should begin in the next six weeks and be completed in 15 months.

"We are in the final process of awarding the tender and it should be completed soon," he said, adding that the group’s target market is half owner-occupiers and half investors.

On Fajarbaru's construction segment outlook, Ooi said the group is tendering for some RM500 million worth of domestic projects and hoping to clinch one or two sizeable projects from it.

"The construction segment will remain our main revenue and income contributor going forward. However, we have to diversify our income stream as construction sector is facing a huge competition," he said.

For its third quarter ended March 31, (3QFY15), Fajarbaru’s net profit fell 18.1% to RM782,000 compared with RM955,000 a year ago, even as its revenue expanded by 93.1% to RM106.03 million from RM54.92 million.

For the nine-month period (9MFY15), the group's net profit was up 35.34% to RM3.37 million against RM2.49 million in 9MFY14; revenue strengthened 28.3% to RM274.66 million from RM214.1 million a year earlier.

The group is set to announce its fourth quarter earnings by end of next month.

At 3.13pm, the stock was up half sen at 43 sen for a market capitalisation of RM139.8 million.