Thursday, 15 June 2017

(NST) Encorp expects two projects to drive revenue

CONSTRUCTION and property group Encorp Bhd targets to sustain revenue of between RM350 million and RM370 million in financial year 2017, supported by two of its unbilled property projects, Encorp Marina Puteri Harbour in Nusajaya and Akasia in Encorp Cahaya Alam, Shah Alam.

Both projects are in the final stages of completion.

The company expects to do better than last year, and is cautiously optimistic about sustaining the revenue level at RM350 million at the least, based on the increasingly challenging market environment.

“We are expecting our two projects to help drive revenue growth this year,” said Encorp group chief executive officer Datuk Zakaria Nordin after its annual general meeting, here, yesterday.

Encorp has recorded RM360.82 million in revenue in the financial year ended December 31 2016, a 71 per cent surge from RM209.89 million previously.

Net profit during the year surged to RM28.53 million from RM1.38 million due to higher work progress achieved by the property development division.

Zakaria also said the company is confident the development value of its 259.56ha land in Bukit Katil, Melaka will double in the next 10 years from the current estimated value of RM3.2 billion, driven by various developments surrounding the area.

These include the Kuala Lumpur-Singapore high-speed rail (HSR).

“We expect the value to double or triple over the next 10 years. Once the HSR project is completed, there will be tremendous development within the area,” he added.

Phase 1 of the Bukit Katil development is expected to start next year, with the launch at the end of the second quarter or early third quarter of this year.

Encorp is partnering with Sinmah Capital Bhd, formerly known as Farm’s Best Bhd, to undertake the RM865 million mixed-development in Bukit Katil.

Encorp said the project would be carried out on a 31.55ha plot.

A joint-venture (JV) company, Sinmah Development JV Sdn Bhd, has been formed to undertake the development, with Encorp holding 70 per cent stake.

Under the agreement, the JV will acquire the land development rights from Encorp for RM69.7 million.

Proceeds from the sale will be used by Encorp as payment to Federal Land Development Authority for the development rights of Bukit Katil land.

Sinmah Development will be responsible for building commercial and residential properties.

The commercial segment, which comprises 23.45ha, will include a medical college and hospital.

The remaining plot will be for residential projects comprising bungalows, semi-detached houses and link houses.