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Tuesday, June 30, 2009

Nagamas to maintain focus on core businesses

PROPERTY and air services company Nagamas International Bhd will remain focused on its two core businesses for now as it looks to conclude the disposal of its entire industrial division by August this year.

"We want to remain focussed and grow our two existing businesses, especially since the property division is undergoing a gestation period," Nagamas chairman Datuk Tan Yik Huay told Business Times after the company's annual and extraordinary general meetings held in Shah Alam yesterday.

Nagamas announced in April 2009 that it was selling its industrial division to Jojevi Sdn Bhd, a special purpose vehicle set up to undertake the sale, for RM4 million and a debt assumption of RM3 million. For the nine-month period ended December 31 2008, the industrial division contributed over 70 per cent of total revenue which stood at RM78.6 million.

The company saw revenue dip slightly by 4 per cent to RM78.6 million from one year ago as it changed its fiscal year-end from March to December, thus concluding its financial year after only nine months.
However, net profit dropped 89 per cent to RM448,236 in the same period due to cost increases in its industrial division in the beginning of the year and a drop in product demand later following the economic recession.

"We do anticipate that we should be able to remain profitable for this year, driven by our aviation services and as the property market in China continues to pick up," said Tan.

The company's subsidiary Nagamas International (HK) Ltd (NIHL) has a joint-venture agreement for the marketing and sale of the commercial and residential units of Longji Blue Bay Commercial and Residential Properties project in China.

However, it entered into a repayment agreement earlier this year with Zhiangxu Zhenda Construction Co Ltd (ZZ) and Zhang Yongliang, concerning the repayment of RM8 million to NIHL by ZZ as ZZ was facing cashflow issues in view of the economic slowdown and was unable to make payments by January 31 2009, amounting to RM8.8 million.

Last week, Nagamas entered into three agreements, which will ultimately lead to it owning 15 units of shoplots in Dragon Mall, Huiyang, valued at 18.61 million yuan, to be offset against the repayments owned by ZZ.

Meanwhile, Tan said Nagamas subsidiary involved in the outsourcing agreement of ticketing and cargo booking business will help contribute to the company's earnings. Aviation services accounted for roughly 20 per cent of revenue last year.

By Business Times

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