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Monday, May 25, 2009

MK Land drafts 5-year roadmap to boost profits

PROPERTY developer MK Land Holdings Bhd has drafted a five-year roadmap, which will focus on developing two core products within its ongoing Damansara Perdana township in Selangor in a bid to enhance profitability.

They are the Armanee Terrace condominium project and Rafflesia, featuring 460 units of three-storey semi-detached bungalows, which collectively will generate a gross development value of RM3.5 billion over the next 10 years.

"MK Land has the ingredients to grow in terms of landbank, products and people. By creating the roadmap, we will be able to position the company going forward," chief operating officer (COO) for group strategy and planning, Balasundram R, said.

"We need to identify the strength of MK Land and how to make it profitable in the longer term," he told Business Times in an interview.
MK Land had posted losses in the financial year ended June 2007/2008 for the first time since its inception more than 10 years ago due to additional cost incurred to complete projects.

The higher costs was a result of errant contractors being terminated, which happened after its major shareholder Tan Sri Mustapha Kamal Abu Bakar stepped down as executive chairman in April 2007 to focus on his private companies.

Mustapha later returned to helm MK Land in June 2008 in the hope of turning the company around by outlining a three-year plan to rejuvenate it.

The plan included identifying Balasundram, Fatimah Wahab, Lau Shu Chuan and Yusof Abu Othman as COOs to handle specific tasks in MK Land such as strategic planning, finance and projects in the central and northern regions.

The four were roped in from within MK Land, Mustapha's Emkay Group and its 75 per cent unit, Setia Haruman Sdn Bhd, the master developer of Cyberjaya.

Since then, MK Land has been able to make profits via cost-efficiency and improving product sales.

The company 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.

MK Land is optimistic to repeat its performance in the second half of its financial year, with revenue surpassing RM350 million, boosted by land and property sales.

Balasundram added that there was a challenge that Mustapha had placed on the four but they are on target now to achieve the plan mapped out.

"Our initial stage was to build cash flow and sell existing property stocks. As completed products are now tapering down, we are moving to the next step which is to focus on new launches in our road to profitability," he said.

The company will also continue with its existing developments in Cyberjaya, Damansara Damai and Ipoh, Balasundram said.

By Business Times (by Sharen Kaur)

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