THE MALAYSIAN RESERVE. 17TH AUGUST: ARK Resources Holdings Bhd has chosen to focus on its development projects situated in Taman Desa Bukit Bujang (TDBB), Kuala Kubu Baru (KKB), for this year, as it expects the appetite for affordable and well-located properties will improve with the general economy.
In its recent annual report, the group noted that it faced substantial challenges as business operations were disrupted and normal work routines were interrupted, the impact of Covid-19 affected its earnings and brought revenues down by 65%.
“The financial year 2021 continued to be a challenging year for the group and Malaysia’s economic growth was slow and this has led to weak consumer sentiment for the market.
“Despite this generally uncertain and volatile economic backdrop, ARK Resources and its subsidiaries achieved a revenue of RM1.06 million this year compared to RM3.09 million last year,” it said.
It added that the lower revenue was recorded as the existing ongoing development project of the group comprising 20 units of one and a half storey semi-detached houses has been completed and new development phases have yet to be launched pending certain relevant regulatory approvals.
“The revenue recorded for the current financial year-to-date was mainly derived from the construction contracts carried out by the group,” it said.
Meanwhile, the group has on Jan 30, 2019, via its wholly owned subsidiary ARK Resources Bhd entered into a joint venture development agreement with a third-party to develop several parcels of land in southwest Penang district into a multi-phased integrated development via a joint development scheme.
“The said joint venture development agreement is currently pending the fulfilment of certain conditions precedent as provided in the agreement,” it said.
The group’s current focus, which is the TDBB development, is a mixed housing and commercial development in KKB, Ampang Pecah, Selangor.
This project was formerly under the “Projek Pembesaran Kampung Scheme” promoted by the Selangor state government since the late ‘90s with the aim of providing quality but affordable homes to those residing in the growing semi-urban areas of the Hulu Selangor district.
“The key element of this scheme is that the state government will issue land titles directly to participants or purchasers upon payment of land premium with ARK Group in the role of a house builder only, while roads, utilities and other related infrastructure will also be built and provided by the state government,” it said.
In 2014, as a result of the new state priorities, ARK Group’s role under this scheme has consequently changed from a house builder to a full-fledged property developer of TDBB where ARK Group would acquire the land in stages directly from the state government for property development under the new arrangement.
“The total development is spread over land measuring 64.75ha. To date, the group has launched 358 units of which all units have been fully sold and handed over to purchasers,” it said.
During the financial year under review, the main activities in TDBB were centred on the planning to develop 40 units of two storey semi-detached houses, 30 units of bungalow lots and the 52 units of two and three-storey shop offices together with the related infrastructure works.
“As at March 31, 2021, the 40 units of two storey semi-detached houses in TDBB were still pending certain relevant requisite regulatory approvals while the approval for 52 units of two and three-storey shop offices was obtained on Feb 19, 2021.
“In addition, the group will continue to seek development land in strategic locations to further strengthen its property development position,” it said.
For the engineering and construction sector, the group’s main focus is to provide construction support and expertise to the property development division.
“Moving forward, the group is committed to achieving profitability in the coming years.
“In this regard, despite the outlook for the property development division appearing fairly challenging in 2021 and beyond, we will still continue to focus our efforts on building sustainable communities and good quality and reasonably priced products,” it said.
The company believes there is still good demand for this segment despite the challenging business prospects and the prevailing stiff conditions for mortgages.
“The group is continually on the lookout for more strategic land banks with development potential across the country and also other business opportunities to expand the group’s income stream,” it said.
ARK Resources share price hit a year high of 72 sen on Aug 6 before retracing on profit taking to close at 59 sen yesterday. The stock was only valued at 29 sen at the start of the year.