GBG is approved for listing on the Main Board of Bursa Malaysia, in 2011.
Extracted from Annual Report 2015
Dear Valued shareholders,
The FYE 2015 has been a challenging year indeed with the economy performing sluggishly due to various global as well as domestic factors. The Group has continued to carry out the projects we have on hand efficiently and on schedule. However, the Group recorded an overall loss in their income statement for FYE 2015 due to one-off exceptional losses incurred during the 3rd quarter of the financial year under review. We have a strategic recovery plan in place nevertheless, and have already begun steadily increasing the Group's revenue towards a return to profitability.
Consequently, the Group's property development projects held a total of unbilled sales of sold units of approximately RM138.5 million and an unbilled sales of unsold units at approximately RM632.1 million. Our utmost priority is to continue the conscious efforts being made by both the Board and management team to guide the Group back to a positive financial balance sheet.
The Group recorded RM309.47 million in segmental review for FYE 2015, a decrease from RM406.03 million registered in the preceding corresponding year. The lower revenue is due to several existing construction projects that were completed or close to completion, which no longer contribute to the current year's revenue generation. In addition, there were losses incurred arising from the Tropicana Metropark - Paloma project as a result of piling construction works from the project. Subsequently, the Group has decided to provide fully for the losses as well as currently pursuing measures to recover the aforementioned losses from the sub- contractor parties involved in this project through negotiations or legal means.
Despite the softer market conditions in 2015, we are still actively sourcing and participating in tenders for strategic contracts. We believe that the Group will remain competitive and be in good form to pursue long-term stability through new projects.
Some of the major construction projects continued to be undertaken by the Group this year are:-
Klang Valley Mass Rapid Transit ("KVMRT") Package V1
(Sungai Buloh to Kota Damansara station)
The Package V1 of the KVMRT project is 99.84% complete as at 31 December 2015. This project, valued at an estimated contract sum of RM474.26 million, commenced its construction in 2012. Recently, GBGAQRS is awarded with additional work involving the construction and completion of a viaduct guideway for the SSP Spur Line "Reception Track" from depot to the KVMRT Main Line for a contract sum of approximately RM38.94 million. The Group is confident that the deliverables for these projects are on track for its scheduled completion
"The Peak" at Iskandar Malaysia
The Peak is the Group's leading serviced apartment project in Johor Bahru within Flagship A of Iskandar Malaysia. With an estimated project value of RM251.99 million, this development is currently 49.7% complete as at 31 December 2015 and is on track for its scheduled completion
The development of this serviced apartment project began in 2013 and to date, it has progressed smoothly to having reached 72% completion rate by 31 December 2015. This project is valued at an estimated contract sum of RM173.0 million and is on track for its scheduled completion.
The Property Division recorded RM60.42 million in revenue for the FYE 2015 as compared to RM208.94 million recorded in FYE 2014, mainly due to sales cancellations that occurred in FYE 2015 as a result of buyers' unsuccessful efforts to secure mortgage loans due to stricter policies by financial institutions. Additionally, one of our three on-going developments "The Avenue"(shop offices located in Kinrara Uptown, Puchong) was completed in November 2014 and thus, no longer contributed to the Group's FYE 2015 financial performance.
Among the property projects which continue to be undertaken by the Group this year are:-
Situated in Permas Jaya, Johor Bahru, Permas Centro is currently developed across 6 acres of prime land. This development features 3- and 4-storey shop offices with an estimated gross development value ("GDV") of RM166.0 million. The construction for Permas Centro is 96% completed as at 31 December 2015 and is targeted for completion by the 2nd quarter of 2016. To date, 83% of Permas Centro's total of 99 units have been sold.
"The Avenue" at Kinrara Uptown, Puchong
The Avenue was completed in late 2014 and has sold 98% of its total of 177 units. This is the first phase of the integrated commercial centre development at Kinrara Uptown with an estimated GDV of RM225.0 million, featuring 2- and 4-storey shop units serving the surrounding neighbourhood.
One Jesselton Waterfront
This project which is a joint venture with Suria Capital Holdings Berhad for a mixed development in Kota Kinabalu, carries a minimum Net Sales Value("NSV") of RM1.1 billion. However, both parties aim to dedicate their best efforts to achieve a proposed NSV of RM1.8 billion. To be developed across 7 acres of a prime waterfront real estate, One Jesselton Waterfront will feature a shopping mall, corporate offices, serviced suites and apartments, condominiums as well as car park facilities, and a ferry ticketing office. The project will be moving forward in the coming year as we expect the land title to be issued in the second half of 2016.
The Company has through its wholly-owned subsidiary, Sinajasa Sdn Bhd, tied up with the Sabah Economic Development Corporation (SEDCO) by the subscription of 49% stake or 2.94 million ordinary shares of RM1.00 each and owned SEDCO Precast Sdn Bhd.
SEDCO Precast Sdn Bhd manufactures and sells pre-cast concrete products e.g. Reinforced Concrete Piles, Pipes, Box Culverts, L-Shapes, Industrial Building System(IBS) and other customised products for infra-structural and building projects in Sabah and Federal Territory of Labuan.
As we progress into 2016, the Group officially handed over the completed "Provision of Accommodation on Base-Camp Concept" project, complete with necessary facilities for Petronas Chemicals Fertiliser Sabah Sdn Bhd in Sipitang, Sabah, in March 2016. The camp is expected to provide a recurring monthly income stream to the Group for 5 years, beginning from the second quarter of the financial year ending 31 December 2016 ("FYE 2016").
In addition, Kreatif Sinar Gabungan Sdn Bhd, an associate company of the Group, is currently awaiting a Letter of Award from the State Government of Pahang to undertake the proposed development of Pusat Pentadbiran Sultan Ahmad Shah (PPSAS) in Kuantan. Upon receiving the grant from the State Government of Pahang, the Group will begin engaging in a significant portion of the construction works for the project.
Corporate Social Responsibility
GBGAQRS firmly believes in giving back to the communities and environments the Group operates within, and is committed to making concentrated efforts through its Corporate Social Responsibility ("CSR") initiatives and activities. We take our duties as a responsible corporate citizen in Malaysia seriously, and play an active role in addressing CSR, from two (2) major aspects, namely the workplace and the environment. Through various programs conducted in each of these areas, GBGAQRS aims to make positive strides towards improving the well-being of its customers, employees, the local communities we operate in as well as society at large.
We recognise that our passionate and capable employees are the most important assets of GBGAQRS and therefore continuously conduct internal and external trainings for employees when necessary. Over the past year this has included management level training in Human Resource Management (HRM), health and safety training as well as corporate governance related training and development. Facilitated by various reputable parties such as the Malaysian Investor Relations Association (MIRA) and the Malaysian Institute of Human Resource Management (MIHRM), these programs are aimed at improving leadership and efficiency within the Group at all levels, as well as enhancing the decision-making abilities of our employees.
Being the recipient of the HR Asia Best Companies to Work for in Asia 2015 (Malaysia) in November last year proves that the Company walks the talk in its commitment to being one of Malaysia's finest companies to work for.
We are constantly looking for new ways to streamline our efficiency and reduce our carbon footprint. Resources such as electricity as well as raw materials are always used efficiently in all our construction and property development projects. In addition to health and safety standards we regularly review the Group's environmental objectives and targets to ensure that all our operations have the least negative environmental impact possible. Even from the aspect of administrative operations, multiple small initiatives in this area such as switching to energy efficient lighting in offices, cutting down on paper usage and promoting recycling have made a significant impact in ensuring that GBGAQRS's business is sustainable and eco-friendly.
In closing, I wish to extend my sincere thanks to the Board for their guidance and support throughout the challenges the Group has overcome over the past year, which is greatly appreciated. I would also like to commend and thank the rest of the management and the employees of GBGAQRS for their dedication, professionalism and diligent efforts during the year under review. Our people and organisational culture are our greatest resources and the pillars of strength behind the success of the Group's business thus far. With your continued contributions and hard work, I am confident that we will be able to achieve our business goals and in doing so, reward our shareholders by creating value.
To all our shareholders, customers, suppliers, business partners and financiers, I offer my humble gratitude for their strong support, patience, trust and confidence in the Group throughout the years. We hope to continue to build upon all our strong working relationships moving forward as we strive to create added value for our shareholders through responsible growth.
Ng Chun Kooi
Executive Director and Deputy Chairman
29 April 2016