KUALA LUMPUR: Despite net profit dropping more than half to RM20.8 million in the first nine months of 2023 (9M23), Malaysian Resources Corp Bhd is bracing for growth in 2024 with RM4 billion worth of planned real estate projects in both Malaysia and New Zealand.
This is about three times the RM1.5 billion in scheduled launches for Australia and Malaysia in the 2023 fiscal year (FY23).
It is understood that Malaysia, Australia, and New Zealand continue to be the three main markets for MRCB's property development and investment activities.
"There is room for expansion, even if revenue and profits for the overseas projects won't be realised until after all the units have been built and the sold units have achieved financial settlement with the buyers," said a market watcher.
According to him, MRCB will keep searching Australia and New Zealand for opportunities related to land development.
"The company has made a mark in Australia, with past projects mostly sold. They've had a run of achievements," he told NST Property.
MRCB made inroads into Australia in 2009 via its wholly-owned unit, Bitar Enterprises Sdn Bhd, which acquired a 70 per cent equity interest in the Australian firm Yes 88 Pty Ltd.
Yes 88 owned 5,025 sq m of land in Burwood, located 15 km from Melbourne's city centre.
In 2011, MRCB announced that it would develop the site and also 1060 Carnegie, which has a gross development value (GDV) of A$105 million.
The company launched Easton Burwood, consisting of only 126 units, in 2014, its first project in Australia. The units were sold out in less than eight months at prices ranging from A$330,000 to A$800,000 (RM1.13 million to RM2.74 million) each.
"The Australian real estate market has entered the next stage after hitting its bottom in January 2023. The value of the combined capital cities has risen by 8.0 per cent so far this year. And for the rest of this year and into next year, it's likely that rents and property values will continue to rise, albeit more slowly," the market watcher said.
Property prices have been rising since early 2023, despite 13 interest rate hikes from the Reserve Bank of Australia, which have caused official rates to rise by 4.25 per cent over the previous 18 months, he said.
In Auckland, New Zealand, MRCB plans to introduce projects valued at RM1.7 billion, or NZ$589 million, in the upcoming year.
The company will launch The Symphony Centre, its flagship project in New Zealand, featuring a 21-storey mixed development with a GDV of NZ$452 million.
It will also start the refurbishment of Bledisloe House, situated adjacent to the development location of The Symphony Centre, with a GDV of NZ$137 million in 2024.
At home, MRCB will launch Parcel A of 9 Seputeh with a GDV of RM400 million, Phase 1 of Bukit Jalil Sentral with a GDV of RM900 million, and an office tower in KL Sentral with a GDV of RM1 billion.
The company's top priority going forward will still be increasing cash flow through the sale of its unsold completed stock, which, as of September 30, 2023, was valued at RM550 million.
Meanwhile, MRCB's net profit fell by more than half to RM20.8 million in 9M23 from RM51.8 million, while revenue fell 22.2 per cent to RM1.84 billion against RM2.37 billion.
MRCB told the stock exchange that the decline in revenue was due to lower contributions from both the property development and investment, engineering, construction, and environment divisions, following the completion of three major infrastructure construction projects last year and two major property development projects in the first half of 2023 (1HFY2023).
The property development and investment division recorded revenue of RM459.5 million in 9M23.
MRCB said this was due to the 100 per cent completion of the Sentral Suites project in Brickfields in March 2023 and the TRIA 9 Seputeh mixed residential project in Jalan Klang Lama in May 2023.
The main revenue contributors were Sentral Suites, TRIA 9 Seputeh, Alstonia in Bukit Rahman Putra, and rental income from the company's investment properties, such as Menara CelcomDigi in PJ Sentral Garden City.