Gadang Holdings Bhd's property division posted higher revenue and pre-tax profit for the third quarter ended February 29, 2020, despite the coronavirus outbreak, with the first case in Malaysia confirmed on January 25, 2020.
The company's revenue increased to RM60.17 million, as compared with RM35.89 million in the corresponding quarter of the preceding year, on the back of higher property sales achieved in the current year.
Pre-tax profit increased to RM14.42 million for the quarter under review as versus to RM5.09 million in the corresponding quarter of 2019.
For the nine months ended February 29, 2020, total revenue from the property division increased to RM136.32 million from RM129.62 million a year ago.
Pre-tax profit increased to RM29.56 million from RM27.9 million, it said in a filing with Bursa Malaysia.
Gadang said that sales of its townhouse project in Putra Perdana, which has a total gross development value (GDV) of RM160 million had been encouraging.
It launched Elegan @ Putra Perdana comprising 404 units of 1½-storey townhouses from RM446,000 onward and despite a challenging market environment, it sold like hot cakes.
Gadang said that moving forward, it expects the movement control order (MCO) implemented on March 18, 2020, and subsequent conditional MCO (CMCO) will impact the company's property development projects with the sudden suspension of its on-going activities.
"As a result of the MCO and CMCO, the construction and property divisions have experienced delays in completing its projects on schedule. Management has been proactive in taking actions to mitigate the delays and have also implemented stringent cost control measures.
"Operations have since re-commenced, but under strict standard operating procedures, which had disrupted operational efficiency and the dislocation of resources," it said.
Gadang said that the freeze on selling activities during the MCO and CMCO, as well as the lower economic activity in the foreseeable future will have a significant impact on property sales.
The company had been planning to launch several property projects in Cyberjaya, Puchong, and Kwasa Damansara in the financial year ending May 31, 2020.
In Cyberjaya, it has Laman View, an on-going mixed-use development project with an estimated GDV of RM1.5 billion. The 48.4ha project, first launched in 2015 is a joint venture between Gadang's property development arm, Gadang Land Sdn Bhd, and Cyberview Sdn Bhd.
Gadang had been targeting to launch the second phase of Maple Residence in Laman View in the first quarter of this year. The second phase consists of the final landed homes of 146 units of double-storey terrace homes in the mixed-use development.
The later phases of Laman View will include three developments which consist of high-rise apartments and two condominium blocks of about 386 units each.
In Kwasa Damansara, the proposed development will have a total of 780 residential units at an average of 37 units per acre on a freehold designated plot that would comprise a combination of high-rise towers and villas.
Gadang said that it will evaluate its current on-going projects and new launch initiatives to sustain its operations.
The company has a land bank of 114 hectares with a GDV of RM2.52 billion, and total unbilled sales of RM107.8 million.