Posted on 10 May 2023
Steel products manufacturer YKGI Holdings Bhd said its venture into construction and property development will potentially contribute 25% or more to the group's net profit or net assets.
YKGI said it diversified into construction in 2019 when its 80.36%-owned indirect subsidiary, Asteel Development Sdn Bhd (ADSB), undertook construction and renovation works relating to the installation of industrialised building system (IBS) products for the group's customers.
"The management of the group had since stepped up its efforts to grow this business segment, resulting in this segment contributing approximately 3.36% to the revenue of the group for the financial year ended Dec 31, 2022 (FY2022)," the group said in a bourse filing.
It added that ADSB has secured RM17 million of orders for its construction business, and submitted tender applications and quotations for construction works amounting to RM6.2 million in value.
As for property development, YKGI said ADSB had on Feb 20 this year accepted the terms and conditions offered by Sarawak's Housing Development Corporation (HDC) to undertake the development of affordable houses and apartments in Sungai Tengah, Kuching.
“The management of the group believes that upon completion of the proposed development, the group is able to leverage on the successful completion and property development track record, as well as the accumulation of sufficient experience by the property development team, to enable the group to embark on additional viable ventures relating to property development through organic and/or inorganic approaches," the group said.
It said it proposes to seek the approval of its shareholders for the diversification as required under the listing requirements.
YKGI reported a net loss of RM2.12 million for the fourth quarter ended Dec 31, 2022 (4QFY2022), compared with a net profit of RM2.17 million a year earlier. Quarterly revenue rose slightly to RM74.29 million from RM71.52 million.
For the full year, the group posted a net loss of RM5.89 million against a net profit of RM6.42 million in FY2021, as revenue increased to RM276.70 million from RM243.69 million.
YKGI’s share price closed unchanged at 12 sen on Friday (May 5), for a market capitalisation of RM58.18 million.
Source:The Edge
