MGB Bhd, a subsidiary of LBS Bina Group Bhd, is cautiously optimistic about its performance in the coming quarters, owing to the slow recovery of the property market, according to its group executive vice-chairman, Tan Sri Lim Hock San.
Lim said that the RM1.5 billion allocation for low-cost housing construction and the RM2 billion in guarantees for gig workers proposed in Budget 2022 should bode well for the construction industry because there will be more developments to build.
Based on the Economic Outlook 2022 report, the construction sector's growth has been estimated to be in the double-digit region in contrast to the overall economy which has been projected to only grow modestly between 5.5 per cent and 6.5 per cent.
"We believe all these factors augur well for MGB. Moving forward, the company will be focusing on the development and construction of the Rumah Selangorku Idaman MBI projects," he said.
The Rumah Selangorku Idaman MBI projects, which were launched by the Selangor State Government in October comprises a total of 7,210 affordable apartments, with an estimated gross development value (GDV) of RM2.5 billion.
The first of six projects to be developed under this initiative is Idaman Bandar Saujana Putra (BSP).
MGB will build BSP using its industrialised building system (IBS) precast system, according to Lim.
According to him, the response has been very positive, and the company is looking forward to launching the remaining projects in the coming months.
MGB recently announced its third-quarter results for the fiscal year ending December 31, 2021 (Q3 FYE21).
The company made a net profit of RM2.01 million on revenue of RM111.12 million in the quarter under review.
This was accomplished, according to Lim, despite the tumultuous effects of the Covid-19 pandemic.
MGB also reported a healthy cash flow, which increased fourfold to RM33.91 million from RM7.34 million in the same period last year.
For the nine-month financial period ended September 30, 2021, the company recorded a turnover and net profit of RM405.21 million and RM16.18 million respectively, a surge of 6.2 per cent and 96.5 per cent as compared to RM381.7 million and RM8.23 million achieved for the corresponding period in 2020.
"It has been a challenging quarter but delivering profitability and enhancing stakeholder value are our top priorities. We are thankful that the implementation of the right strategies, which includes leveraging on our IBS precast concrete for our construction projects, allows us to save on costs and MGB was able to continue to report profits," he said in a statement.
According to Lim, MGB's outstanding construction order book stands at a healthy RM1.79 billion.
He said the company's developments are progressing steadily. This includes projects under the Rumah Selangorku Idaman MBI initiative and a turnkey project to develop 1,000 acres of an industrial estate in Kerteh Biopolymer Park, Terengganu with a GDV of RM680 million.
"To add on, our high-rise residential apartment in Molek, Johor, and our Laman Bayu double-storey housing development gives us an estimated GDV of RM366.5 million and RM45 million respectively. We will push forward and bid for more projects to ensure a continuous replenishment of our order book in the years to come," said Lim.