Two new Mudajaya property projects, one in PJ Sec 13

By THE STAR

PETALING JAYA: Mudajaya Group Bhd is expected to unveil two new property projects in the Klang Valley in the next six months.

Group managing director and chief executive officer Anto Joseph said that the projects would be high-end mixed development.

He said one of the projects was expected to comprise mainly serviced apartments on the land previously occupied by the group’s old office in section 13, Petaling Jaya.

“We are expanding our property development business. Hopefully, in the next six months two other property projects will take off,” he told reporters after the company’s EGM here yesterday.

Joseph said the group was still at the negotiation stage for the two projects.

He added that one of the projects would be developed by its unit, while the other would likely be through a joint venture.

With these two projects and the recently announced mixed development joint-venture project in Tropicana, Petaling Jaya, Joseph said the group should have a final gross development value (GDV) of RM2bil.

To recap, Mudajaya in early September announced that its sister company Mulpha Land Bhd had proposed to form a joint venture with MJC Development Sdn Bhd to develop a mixed residential and commercial project in Tropicana.

The project, which comprised mainly serviced apartments, came with a GDV of RM700mil. It would be developed by the JV company Mayfair Ventures Sdn Bhd, in which Mulpha would own a 51% stake, while MJC would own the remaining 49% stake.

According to Joseph, the group’s Tropicana mixed development project would be formally launched in the third quarter of 2014.

“Property development is part of our diversification strategy. We want to create our own construction work instead of doing construction for third parties. When we are both the contractor and developer, our total margins can only be better,” he said.

He said Mudajaya’s property business currently accounted for only between 3% and 4% of the group’s earnings.

“By around 2015 to 2016, contribution from the group’s property business should increase to account for at least 10% of total earnings,” he said.

On Mudajaya’s power plant business in India, Joseph said the group had yet to find the right partner to form a consortium with its current partner to bid for new projects in the country.

“We are not rushing in. We are watching the Indian market carefully because these (power plants) involve huge investments.

“We plan to raise funds entirely from the Indian market for the power plant projects, so we are monitoring closely the movement of the rupee and the financial stability there,” he added.

In October, Mudajaya said that it was looking for a new partner to form a consortium along with its existing partner in India, RK Power Pvt Ltd, to bid for two ultra mega power plant projects with a combined capacity of 8,000 megawatts in India.

Mudajaya’s net profit for the nine months to September 2013 came in 32.5% lower at RM128.3mil, compared with RM189.9mil a year earlier due to lower contribution from its construction segment. Earnings per share fell to 23.65 sen from 34.86 sen. The group’s revenue, on the other hand, dropped 11.1% to RM1.2bil from RM1.35bil.

Joseph said the group expected 2013 to the early part of 2014 to be a consolidation period.

He, however, was confident that earnings would strengthen significantly by 2015, when contribution from the property segment and its power business in India kicked in.

- Malaysia Property News

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