In today’s edition of Evening 5 — China’s Country Garden has come out to assure that its mammoth Forest City project is on track, even as doubts continue about its financial strength. Meanwhile, FGV has posted its first quarterly loss in over two years.
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00:04 Embattled Chinese developer Country Garden said on Monday that its forest city project in Johor
00:09 was proceeding as planned and it has sufficient assets, despite concerns about its financial
00:14 strength amid debt woes, according to a report by Reuters. This comment by China's largest private
00:20 developer came after it missed two dollar coupon payments this month, totaling 22.5 million US
00:27 dollars, fueling fears that the country's property debt crisis could hamper a broader economic
00:32 recovery and spill overseas. In a statement, Country Garden's Singaporean and Malaysian units
00:37 said that its company's projects in Malaysia are operating normally and the sales performance is
00:43 strong, adding that its overall operations in the region was safe and stable. It added that various
00:50 debt management measures are considered to actively resolve the pressure of periodic liquidity to
00:55 ensure the company's long-term future development, but did not elaborate. Meanwhile, Bang Negara came
01:00 out to say that the current development with Country Garden in China is not expected to pose
01:05 any material impact on the overall property market in Malaysia. The massive forest city project,
01:11 built across four reclaimed islands in Johor, has been beset by challenges since its 2016 launch
01:17 and is now home to about 9,000 people, Reuters reports. Demand fell sharply following China's
01:23 move to stem capital outflows and the COVID-19 pandemic, which prompted fears of a housing glut
01:30 and environmental damage from the land reclamation. Country Garden's statement came after
01:34 Prime Minister Datuk Sri Anwar Ibrahim announced last week that the project would be designated a
01:40 special financial zone to attract investment and help cut the cost of doing business there. Among
01:46 the new incentives offered are a special income tax rate of 15% for skilled workers and multiple
01:52 entry visas. Forest City is a JV with Esplanade Dangar 88, a private company backed by the Johor
01:58 State Government and the Sultan of Johor. The project aims to house 700,000 people by 2035
02:04 in a development that includes office towers, malls and schools, besides residential buildings.
02:10 FGB Holdings recorded a net loss of $12.9 million for its second quarter
02:20 versus a net profit of $374 million a year ago due to lower CPO prices and the impairment loss
02:27 of its Indonesian plantation assets. This is the plantation giant's first quarterly net loss
02:33 since the first quarter of FY 2021 when it posted a $35.4 million net loss. Revenue for the quarter
02:40 also declined by 35% year on year from $7.43 billion in the second quarter of FY 2022 to
02:47 $4.49 billion. The quarterly loss meant that FGB was in the red for the first half with a net loss
02:54 of $805,000 compared with a net profit of $743.3 million in the same period last year. Cumulative
03:02 revenue declined 32% year on year to $9.09 billion. In a statement, FGB said it expects CPO prices to
03:09 remain stable in the near future, ranging between $3,800 and $4,000 per tonne, primarily due to the
03:16 adjustment of Indonesia's CPO export quotas. CEO Dato' Nazro Mansur says that the planter will
03:23 implement key strategic initiatives to mitigate these challenges and enhance productivity and
03:28 anticipates continued improvement throughout the year. FGB said it invested approximately
03:33 $196 million for its ESG initiatives in the first half, including ongoing engagement initiatives
03:40 with independent auditing firm Elevate and the U.S. Customs and Border Protection to address
03:45 the suspension of the withhold release order. AirAsiaX posted its fourth consecutive quarterly
03:56 net profit in the second quarter of $5.54 million, a vast improvement to the massive net loss of $652.5
04:03 million it posted the year before. Quarterly revenue soared 379% on the back of a surge in
04:11 international travel as borders reopened and more aircraft were brought back into service.
04:16 During the quarter under review, the company carried a total of 621,984 passengers,
04:23 delivering a surge of 70 times year-on-year with a passenger load factor of 76%. Available
04:30 seat kilometers was recorded 25 times higher year-on-year, standing at 3,509 million,
04:36 with a recovery rate of 42% against the corresponding period in 2019. Compared with
04:41 the same period last year, the number of sectors flown increased by over 27 times,
04:46 from 81 sectors to 2,234 sectors as of June 30, 2023. Looking ahead, CEO Benyamin Ismail said
04:55 the group remains on track to have at least 16 aircraft operational by the fourth quarter
05:00 and is confident that AAX will maximize the positive impact of the market once the peak
05:06 travel season begins in earnest at year-end. He adds that the airline is also driving its
05:11 commercial ambitions with new and improved product offerings across all its revenue
05:15 segments as it works to further enhance its pricing strategy.
05:24 Siam Darby Property has revised up its sales target for FY2023 from 2.3 billion to 2.7 billion
05:32 and its GDV launch target of 3 billion to 4 billion ringgit. It said this in a statement
05:37 to The Boss when announcing that its net profit for the second quarter fell 32% year-on-year to
05:42 71.1 million due to a higher share of losses from joint ventures. In contrast, revenue for the
05:49 quarter actually improved to 688.9 million from 615.6 million a year ago. Siam Prop also declared
05:57 an interim dividend of one cent per share. It was a similar story for the first half,
06:01 where net profit declined 16% to 131.7 million despite revenue growing by 26% year-on-year
06:09 from 1.09 billion to 1.37 billion ringgit. Siam Prop said it had recorded sales totaling 1.5
06:16 billion, representing 65% of its previously lower 2.3 billion sales target. It said the
06:22 industrial segment was the key contributor, with 40% of 597 million of total sales achieved in
06:30 the first half. Group Managing Director Dato' Azmir Merikan said in the face of current market
06:35 dynamics, the developer strategy is rooted in understanding market nuances and consumer demand.
06:41 He says this has allowed it to pivot effectively and capitalize on areas of growth,
06:45 while maintaining consistency in its offerings. On the outlook for the rest of the year,
06:50 Siam Prop says it is confident that the strong momentum it saw
06:53 in the first half will continue into the second half.
06:56 Mercury Securities Group, which is slated for listing on the ACE market on September 19,
07:05 expects better revenue recognition from the margin financing component of its stockbroking business
07:11 post its initial public offering. Managing Director Qiu Xingguan based its confidence
07:16 on the margin financing business's compounded annual growth rate of 36% from FY2019 to FY2022.
07:25 Mercury Securities has allocated 26.86 million from its total targeted IPO proceeds of 39.27
07:32 million to expand this part of its business. The proceeds are based on the issuance of 157.09
07:38 million shares at an issue price of 25 cents per share. Qiu explains that Mercury Securities is
07:44 using internally generated funds to give out credit facility, but the IPO proceeds will allow
07:49 it to expand the provision of the margin financing facility to its existing and new stockbroking
07:55 clients. On the corporate finance segment of the business, Qiu said the IPO component is the
08:00 profitable part at the moment, adding that the group is currently engaged with eight more companies
08:05 to assist them on their listing journey. In 2022, Mercury Securities facilitated five IPO exercises,
08:12 of which one was for the main market, while two were listed on the ACE market,
08:16 and the remaining two were on the LEAP market.