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| KLCC Property in pursuit of higher revenue [ 04/09/2006 ] |
ASSET-RICH property player KLCC Property Holdings Bhd’s (KLCC Prop) focus this year is to increase revenue while simultaneously optimising costs.
Chief executive officer Datuk Ishak Imam Abas said potential revenue could be further realised from rental of office space in Kompleks Dayabumi, Suria KLCC Retail Mall and the Mandarin Oriental Kuala Lumpur.
''Initiatives on cost optimisation meanwhile, are ongoing,'' he told StarBiz in an email interview.
The company, which has a strong asset base, is the owner of eight properties.
They are the Petronas Twin Towers, Menara ExxonMobil, Menara Maxis, Suria KLCC, Mandarin Oriental, Kompleks Dayabumi, a vacant land known as Lot D1 and another vacant land currently being developed as Lot C.
The company recently announced its results for the first quarter ended June 30, reporting a net profit of RM42.2mil on revenue of RM190mil, compared with a net profit of RM37.1mil on revenue of RM187mil a year earlier.
Pre-tax profit for the first quarter was RM94.2mil as opposed to RM91.6mil in the same period a year ago, while earnings per share stood at 4.52 sen versus 3.97 sen.
Commenting on the company’s first-quarter performance, Ishak said: ''The increases in both revenue and profit before tax were mainly contributed by higher revenue from car parks, the retail mall and hotel.''
He said efforts were also being carried out to achieve the company’s cost-optimising objectives. ''This includes strategic management activities focusing on our core business, smart partnering with service providers and outsourcing.
''Additionally, we have gone through many years of facility maintenance (such as electricity) and with that experience we can plan our maintenance activities to make them more cost-efficient,'' he said.
On plans for new acquisitions or investments, Ishak said there would be no new asset purchases for the time being. The company’s newest investment is Lot C, a vacant land measuring 4,302 sq m located at Lot 171, Seksyen 58 in Kuala Lumpur.
''The lot is to be developed into a 60-storey building comprising a seven-storey retail podium, 21-storey office block and 32-storey serviced apartments,'' said Ishak.
He said the substructure work would commence next month with the whole project expected to be completed by 2010.
On the outlook for the property sector in general, Ishak said: ''There is still a growing demand for Class A office buildings. Serviced apartments, however, seem to be experiencing a slowdown.''
As for the retail sector, Ishak said competition was becoming increasingly intense as more malls were being constructed and many having similar types of outlets.
''Location is still the key factor for all properties. For retail malls – easy accessibility and security – are some plus points that can edge out competitors.
''As for hotels, the level of service provided is still the prime factor in ensuring success,'' Ishak said, adding that the company had no plans for any foreign investments for the time being.
Meanwhile, an analyst with a local bank-backed brokerage said KLCC Property offered good growth potential to investors.
''Visit Malaysia 2007 is the catalyst for the counter moving forward,'' he said
He noted that companies involved in retail and hotel sectors such as KLCC Property were expected to receive a boost in view of the anticipated increase in tourist arrivals next year.
The analyst has an ''outperform'' call on the stock.
Source : The Star 04/09/2006
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