Published in NST Property
Scientex Bhd, which has businesses in packaging and property development will launch affordable housing projects in Kedah and Melaka in its next financial year ending July 31, 2022 (FY 2022).
The company acquired about 65 hectares (ha) of development lands in Sungai Petani, Kedah, and around 64ha of prime lands in the vicinity of Jasin town, Melaka in the current fiscal year 2021.
Scientex said following the completion of the land acquisitions, it expects to launch its developments in these lands in FY 2022 to meet the robust demand for affordable housing in these localities.
It said in a filing with Bursa Malaysia yesterday that with Bank Negara Malaysia maintaining its Overnight Policy Rate at 1.75 per cent, it is expected to provide enabling conditions for a sustainable economic recovery for the domestic economy.
"The company remains focused on the affordable housing segment by leveraging on cost controls and efficient land use to maximise returns whilst ensuring cost-competitive products continue to go on-stream," it said.
Scientex said it will also continue to seize opportunities to acquire more competitively priced landbanks at suitable locations within Peninsular Malaysia to expand its affordable housing brand name.
The company said to date it has committed to purchase additional development lands in Pulai and Tebrau, Johor, and in Seberang Perai Utara, Penang.
On September 21, 2020, Scientex announced that its wholly-owned unit Scientex Quatari Sdn Bhd (SQSB) entered into a Sale and Purchase Agreement (SPA) with Lee Pineapple Company (Pte) Ltd for the proposed acquisition of eight parcels of freehold land in Pulai, measuring a total of about 80ha for RM185 million.
Then on May 7, 2021, SQSB entered into a conditional SPA with Pelangi Sdn Bhd for the proposed acquisition of eight pieces of freehold land in Tebrau, measuring around 480ha for RM518.1 million.
Scientex had said that the proposed acquisition will be completed in stages up to the first half of the year 2024.
In Penang, the company announced on April 5, 2021, that SQSB and another wholly-owned unit Scientex (Skudai) Sdn Bhd entered into SPAs with two separate parties to acquire agriculture land in Seberang Perai Utara for a total of RM246.7 million.
The proposed acquisition is expected to be completed in the first half of the year 2022, it said in the filing.
Scientex said the rationale for the proposed acquisition is so the company could build more affordable homes with the objective of completing 50,000 affordable homes throughout the country by 2028.
It also said the lands are expected to provide a steady and sustainable property development model as the company continues to focus on landed affordably priced properties which demand has remained firm and resilient.
Scientex to have better earnings?
Scientex said since the announcement of the Full Movement Control Order (FMCO) effective June 1, 2021, certain development sites of the company were gradually granted approvals from the relevant authorities to continue operations in strict compliance with the standard operating procedure (SOP) in place.
"Notwithstanding the approvals, Scientex foresees that there could be potential delays in obtaining permits and approvals from the relevant authorities as well as delays in constructional activities, hence impacting our progress billings for the coming quarter," it noted.
Scientex Bhd's net profit for the third quarter ended April 30, 2021 (Q3) increased to RM109.88 million from RM69.63 million recorded in the same quarter a year ago.
Revenue rose to RM976.80 million from RM772.23 million previously, the company said in the Bursa Malaysia filing.
Scientex said the higher results were driven by better performance in the packaging and property divisions during the quarter compared to the same period previously.
"While the global economy continues to recover, particularly in the major economies, recovery in some economies may be affected by the resurgence in the Covid-19 pandemic, especially the variant strains.
"As such, uncertainty with regard to the successful curbing of the pandemic and the potential risks of heightened financial market volatility may continue to afflict the global economy. On the other hand, the current vaccination drive undertaken by world economies is expected to boost sentiments as market confidence gradually returns," it said.
For the nine-month of FY 2021, Scientex recorded revenue of RM2.69 billion compared to the preceding year's corresponding period of RM2.56 billion.
Property revenue stood at RM811.5 million for the current financial period, an increase of 28 per cent compared to the preceding year's corresponding period of RM634.3 million.
In line with the increase in revenue, operating profit increased from RM185.8 million to RM228.4 million for the same period.
Scientex said the increase in revenue and operating profit were mainly contributed by steady construction progress and strong take-up rates for new launches in Scientex Tasek Gelugor, Penang; Scientex Kundang Jaya, Selangor; Scientex Durian Tunggal, Melaka; and Taman Pulai Mutiara, Johor.
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