MK Land expects to post net profit of RM20m

MK LAND Holdings Bhd, controlled by developer Tan Sri Mustapha Kamal Abu Bakar, is optimistic of achieving RM20 million in net profit for its current fiscal year, boosted by land and property sales.

The developer expects sales to surpass its initial target of RM350 million.

It made a net profit of RM10.1 million in the six months ended December 31 2008, against a net loss of RM18.3 million in the same period of 2007 while revenue doubled to RM125 million.

Mustapha Kamal said MK Land will be able to repeat a similar performance in the second half of its financial year.
The confidence is built on its recent land sale (9.2ha) at its Damansara Perdana township in Selangor, for RM150 million.

It also sold RM150 million worth of residential and commercial properties at the township in the past seven months.

"MK Land has turned around, thanks to the group as a whole. We have turned losses into profits. We are going on the road to recovery. It would mean that the structure we have, seems to be working," he told a news conference in Damansara Perdana yesterday.

Mustapha Kamal, who returned to helm MK Land in June 2008 after a brief spell with his private companies, had outlined the details of a three-year plan to rejuvenate the company last year.

Four people were roped in from Emkay Group, and its 75 per cent unit, Setia Haruman Sdn Bhd, the master developer of Cyberjaya, to handle specific tasks such as strategic planning, cash flow, and projects in the south and north.

MK Land is aiming to launch five major projects over the next 3-5 years, worth RM4.1 billion collectively.

They are North West Corner, Armanee Terrace Condo and Metropolitan Square in Damansara Perdana, Armanee Condo in Damansara Damai, and Jelapang One in Ipoh, Perak.

MK Land will use RM73 million from its RM150 million land sale to kickstart the projects.

Mustapha Kamal said cash from the operations are being earmarked to repay its final bond of RM60 million, due in June.

However, in case cash from the operations are not received on time, it will utilise from the balance of RM77 million, to pay for the bonds, he said.

"We recognise that there is a slow down in the property market as a result of the current economic downturn.

"But with excellent location and value-added products, we are sure they will sell through aggressive sales strategies. We have what the market wants," Mustapha Kamal added.

MK Land has 2,710ha of land, which will be able to generate as gross development value of almost RM20 billion.

By Business Times (by Sharen Kaur)