Naim sees property division as main growth driver

KUCHING: Naim Holdings Bhd’s (Naim) property division was the main driver of earnings for the group despite the challenging environment, with record breaking sales of RM330.9 million in 2013.

Naim highlighted in its Annual Report 2013 that a total sales of 692 units comprising of residential and commercial properties were sold, with successful launches and sales in Bintulu, Miri and Kuching throughout the year.

According to chairman Datuk Amar Abdul Hamed Haji Sepawi and managing director Datuk Hasmi Hasnan in the report, this is a challenging sector, with increased competition, higher construction costs, stricter bank lending regulations and higher logistics costs.

“The sector was made even more challenging by the recent imposition of new regulations to curb property speculation such as higher real property gains tax (RPGT) and banning of interest capitalisation schemes – all such regulations created an unfavourable buyer sentiment in that buyers adopted a ‘wait and see’ attitude in the later part of 2013 in anticipation of the implementation of such regulations in 2014,” they noted.

That said, to capitalise on the increased ‘live and play’ lifestyle in Kuching, Naim had launched its iconic Kuching Paragon Integrated Development, commencing with its first component, Sapphire On The Park upmarket condominium development on February 2, 2014.

This component was also the first product under its newly established upmarket brand known as the ‘Naim Signature Collection’, designed to move Naim up the value chain.

In addition to Kuching, Naim’s Bahagia Residences apartments in Miri, which were also launched on February 2 has received overwhelming response.

“Although we expect some degree of slowdown in the take-up of our Kuching Paragon’s Sapphire development and Bintulu Paragon’s Street Mall and Small Office Versatile Office (SOVO) developments, competitive pricing and attractive product packages may sustain demand for these properties,” they projected.

In addition, they highiglighted that the bustling business environment brought about by the Sarawak Corridor of Renewable Energy (SCORE) helps to sustain market demand in the State.

Moving forward, Naim has also planned for launches in Kuching, Bintulu and Miri throughout 2014 comprising apartments, condominiums, terrace, semidetached and detached houses, and also shoplots.

With over 2,500 acres of land bank located at Sarawak’s key growth areas namely Bintulu, Miri and Kuching, it expects a bright future for the group.

In addition, Naim is also looking at expanding its land bank through direct purchase of suitable land and joint ventures.

“As part of our long term plans, we continue to actively seek opportunities to acquire strategic land banks in Sarawak, Sabah and Semenanjung Malaysia to further strengthen the growth of the Property segment in terms of sales, profit and market share,” they affirmed.

In regards to the group’s largest revenue contributor; the construction division, Naim reported that since December 2012, it has managed to secure about RM849 million new order book cumulatively.

The new order book, which includes Naim’s share in joint venture (JV) projects, is expected to sustain its short term earnings growth.

“For the short to medium term, a number of sizeable construction tenders has been submitted and we are cautiously optimistic to secure some to replenish and increase our order book which currently stands at about RM1.25 billion (including Naim’s share in JV projects).

“For the longer term, we have our eyes firmly  on Sarawak Corridor of Renewable Energy (SCORE) – with our track record, we are capable of tackling these projects,” the chairman and managing director revealed in the annual report.

In terms of operations, the revamp of Naim’s Construction Division is now underway, with a new construction project team and revamp of existing operational procedures and processes.

In addition, it highlighted that various proactive efforts and measures have been put in place to tighten cost controls and improve efficiency to closely monitor operational costs and improve construction margins.

“In view of the competitive market in recruiting the best talents, we have appointed a renowned human resource consultant, Aon-Hewitt to study and work out suitable Long Term Incentive Plan for our group and is expected to be completed by the third quarter of 2014,” they added.

On Naim’s oil and gas division, the group highlighted that its achievement in the divsion’s construction projects is notable, via its partnership with Samsung Engineering Co Ltd (Sabah Oil and Gas Terminal) and involvement with JGC Corporation, Japan (LNG Train 9 project in Bintulu, Sarawak).

“With these collaboration and involvement, particularly with JGC (one of the largest LNG contractors in the world), it has given us a valuable insight and lesson in world class project management system by virtue of ‘transfer of technology’, which will further strengthen our operations and enhance staff efficiency,” Datuk Abdul Hamed and Datuk Hasmi said.

They further noted that these projects signal the dawning of a new frontier for the group – a platform for new and exciting opportunities in this industry in time to come.

SOURCE: Borneo Post Online (26 May 2014)