Financials
Quarterly Report For The Period Three And Nine Months Ended 31 December 2009
Financials Archive
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Condensed Consolidated Income Statement
The condensed consolidated income statement should be read in conjunction with the audited financial statements for the financial year ended 31 March 2009 and the accompanying explanatory notes attached to this interim financial statements.
Condensed Consolidated Balance Sheet
The condensed consolidated balance sheet should be read in conjunction with the audited financial statements for the financial year ended 31 March 2009 and the accompanying explanatory notes attached to this interim financial statements.
Review of Performance
The Group achieved a revenue of RM7.6 million and a pre-tax loss of RM9.1 million for the quarter under review against the preceding quarter's revenue of RM27.2 million and pre-tax loss of RM970,000.
Revenue for the current quarter was derived mainly from the sales of bungalow lots in Equine Park, Seri Kembangan and continued recognition of construction progress of the Group's on-going property development projects in Seri Kembangan, Cheras and Batu Kawan in Penang. The revenue for the current quarter has also taken into account a reversal of sales revenue of RM6.2 million pertaining to the termination of two sales and purchase agreements (SPA) for the sale of land which were transacted in November 2002. The termination of the two SPAs also necessitated a write back of profit amounting to RM4.2 million which has been included in the provision for losses from potential sales revocation of RM11.5 million made in the previous financial year's accounts.
Setting aside the sales reversal, the actual revenue for current quarter would be RM13.8 million. The lower revenue in the current quarter compared to preceding quarter was mainly attributable to lower sales quantity of bungalow lots.
The Group's higher pre-tax loss of RM9.1 million for the quarter under review compared to preceding quarter's RM970,000 was attributed mainly to the following:
- lower gross profit generated from lower sale quantity of bungalow lots by RM4.3 million as compared to preceding quarter;
- additional provision for liquidated and ascertained damages totalling RM2.7 million arising from extended delay in completion for Batu Kawan projects;
- charge out over-capitalised development expenditure of Batu Kawan projects of RM2.4 million
- loss of RM0.9 million arising from disposal of a parcel of leasehold land in December 2009.
Commentary On Prospects
In the last financial year ended 31 March 2009, the Group embarked on some measures to address the challenging economic and business environment, anticipated in that financial year as well as to overcome the financial impact on future years.
These measures focused on enhancing cash flows, disposals of low-yield land or those with catalytic development effect, improving profitability through financing costs reduction and minimising compensation for late delivery, and addressing business continuity issue on land banks. These measures were intended to assist the Group to lay a stronger foundation for growth as well as to generate better returns in future projects to be undertaken by the Group.
The Board is of the view that the Group's prospects for the forthcoming quarters will improve as the local economy starts to recover from the recent global economic crisis. The recovery in the local economy is expected to boost the confidence of investors in landed properties. To capitalize on the improving market sentiments, the Group will be launching several new projects in Seri Kembangan and Cheras in the forthcoming quarters.