MANAGEMENT DISCUSSION AND ANALYSIS
From humble beginnings as a small time property developer in Kedah, Oriental Interest Berhad (“OIB” or “the Company”) was listed on the Main Board of the then Kuala Lumpur Stock Exchange (now the Main Market of Bursa Malaysia Securities Berhad) on 18 October 1994 and we have always look forward since.
Following an equity buyout and corporate restructuring in late 2013, we have charted impressive growth year-on-year bolstered by 4 business segments; commercial and residential property development, general construction, oil palm cultivation and investment holding. Property development is our engine of growth followed by construction and oil palm cultivation.
Today, OIB and its subsidiaries (“the Group” or “OIB Group”) is a leading player in the niche development of affordably priced and functional and stylish housing. For OIB, development is about people; transforming places and lives through the creation of sustainable and thriving communities. We have delivered more than 26,900 completed units as of to-date with gross development value (“GDV”) of RM3.3 billion. Our vision remained steadfast: building quality and attractively priced homes without compromising on aesthetics and functionality.
Objectives and Strategies
The continued success of our Myra series of residences in the central region; Myra Gardens in Rawang, Myra Vista in Bandar Baru Salak Tinggi, Myra Meranti in Puchong, Myra Saujana in Dengkil, Myra Alam in Puncak Alam and Myra Putra in Kajang, speaks volume of the Group’s focus: perceptive comprehension of buyers’ preference for elegant family oriented developments as well as a creative and innovative approach to sustainable housing design, construction and high quality finishing.
As part of the drive to ensure that all future OIB’s launches will meet and address the needs and desires of the discerning buyers, the Group has a highly experienced team together with ideas from external consultants, managing every process and aspect of the development and construction activities from planning and development, technical and engineering consultancy, building and construction, architectural and interior design to safety and health, sales and marketing, customer experience, to quality assurance and control as well as property management.
Financial Review
On 19 November 2019, the Company announced the change in its financial year end from 30 June to 31 August. As such, the new financial period commenced from 1 July 2019 to 31 August 2020 (“FPE2020”) covering a period of fourteen (14) months. Thereafter, the financial year end of the Company shall end on 31 August for each subsequent year.
Statements of Profit or Loss and Other Comprehensive Income
An analysis of our performance for FPE2020 against that as reported for financial year ended 30 June 2019 (“FYE2019”) is as illustrated.
Revenue and profit The Group recorded a revenue of RM267.1 million and profit before tax (“PBT”) before tax of RM71.6 million compared to RM296.5 million and RM65.7 million respectively in FYE2019. Revenue was down by 10.0%, as construction works were halted temporarily during the imposition of lockdown and closure of all businesses (except for those involved in essential services) under the MCO (“Movement Control Order”) which lasted from 18 March 2020 to 3 May 2020.
On the flipside, PBT grew by 9.1% due largely to:
(a) adoption of amendments pursuant to MFRS 123: Borrowing Costs during FPE2020 whereupon finance costs totalling RM7.2 million were re-allocated and capitalised to qualifying assets of the Group, and (b) recognition of government grants income of RM32.5 million (FYE2019: RM11.5 million)
Oriental Interest Berhad 199301017406 (272144-M) 18 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Financial Review (cont'd)
Statements of Profit or Loss and Other Comprehensive Income (cont'd)
An analysis of our performance for FPE2020 against that as reported for financial year ended 30 June 2019 (“FYE2019”) is as illustrated (cont'd).
Revenue and profit The segmental top line is illustrated in the table below: before tax (cont’d) FPE2020 FYE2019 RM’000 RM’000 Segmental revenue (14 months) (12 months) Property development 253,166 280,433 Construction 6,451 9,819 Oil palm cultivation 3,082 2,534 Others 4,372 3,758 Total 267,071 296,544
Property development segment continues to drive revenue; contributing a hefty RM253.2 million or 94.8% (FYE2019: RM280.4 million or 94.6%) to the Group’s revenue.
Construction segment generated RM6.5 million or 2.4% (FYE2019: RM9.8 million or 3.3%) to the Group’s revenue. The huge 34.3% drop in revenue contribution was in tandem with the Group’s focus on in-house property development segment whilst simultaneously seeking out construction work from external customers. Other segments, namely, oil palm cultivation and others also added marginally to the Group’s results.
Cost and Cost and other expenses are as tabulated: other expenses FPE2020 FYE2019 RM’000 RM’000 Various expenses (14 months) (12 months) Cost of sales 189,843 203,414 Selling and distribution expenses 5,395 4,180 Administration expenses 35,252 26,516 Other expenses 2,505 5,715 Total 232,995 239,825
The 6.7% drop in cost of sales was, by large, in tandem with the 10.0% decrease in revenue from property development activities.
Selling and distribution expenses have seen a 29.1% uptick in tandem with growth in revenue and promotional efforts. During this time of less than stellar performance from the property development sector coupled with cautious sentiment adopted by most prospective buyers, there is a need to draw attention to our products and reinforce brand awareness to keep our leadership position as the developer of choice for prospective buyers of affordably priced housing.
The 32.9% increase in administrative expenses was mainly due to longer recognition period during FPE2020 and the increase in staff costs concurrent with recruitment of new senior management personnel with relevant expertise and professional experience.
Other expenses shrank by 56.2% as the Group reduced post completion projects’ associated costs.
Annual Report 19 2020 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Financial Review (cont'd)
Statements of Profit or Loss and Other Comprehensive Income (cont'd)
An analysis of our performance for FPE2020 against that as reported for financial year ended 30 June 2019 (“FYE2019”) is as illustrated (cont'd).
Finance We adopted amendments to MFRS 123, Borrowing Costs where finance cost of costs RM7.2 million was re-allocated and capitalised as qualifying assets of the Group and this reallocation resulted in huge drop in finance costs to RM60,000 during the period under review.
Taxation The Group recorded income tax credit of RM4.5 million in FYE2019 due to higher deferred tax and Real Property Gains Tax (“RPGT”) recognised on fair value surplus of land held for property development. In comparison, the Group recorded income tax of RM17.9 million in FPE2020.
Analysis of tax commitment is as tabulated:
FPE2020 FYE2019 RM’000 RM’000 Various tax expenses (14 months) (12 months) Current income tax 22,134 19,382 Deferred income tax (4,215) (29,381) RPGT - 5,501 Total 17,919 (4,498)
Statements of Financial Position
The Group has delivered a stronger balance sheet position for FPE2020, with explanation for the following significant fluctuations:
As at As at 31.8.2020 30.6.2019 Description (RM’000) (RM’000) Inventories (non-current) 455,481 490,854 Inventories (current) 348,694 183,306 Trade and other receivables 136,048 96,616 Trade payables (non-current) 132,058 215,623 Trade and other payables (current) 231,338 96,519 Loan and borrowings 273,367 247,334 Cash and cash equivalents 21,477 30,942 Total assets 1,214,616 1,094,387 Shareholders’ equity 468,572 438,541
Inventories Net decrease in inventories (non-current) by RM35.4 million was due to the (non-current) following movements under land held for property development (“LHPD”):
• reclassification from LHPD to property development costs (“PDC”) upon commencement of projects of RM120.2 million; • additions of LHPD of RM72.4 million; and • capitalisation of finance costs of RM12.4 million.
Oriental Interest Berhad 199301017406 (272144-M) 20 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Financial Review (cont'd)
Statements of Financial Position (cont'd)
Inventories Inventories (current) consist of PDC, developed properties and plantation (current) supplies. The higher level of inventories (current) during the period under review was due to inclusion of newly developed properties. As at 31 October 2020, about 61% of these developed properties had been sold off.
PDC increased from RM158.5 million to RM322.2 million partly due to additions of PDC and reclassification from LHPD upon commencement of projects during FPE2020.
Plantation supplies were approximately the same for FYE2019 and FPE2020.
Trade and other Trade and other receivables increased to RM136.0 million from RM96.7 million receivables in FYE2019 due to increase in trade receivables arising from new projects and completed projects.
Trade payables The 38.8% drop in trade payables (non-current) was due to reclassification made (non-current) to trade payables (current) concurrent with commencement of projects during FPE2020.
Trade and other Trade and other payables increased to RM231.3 million (FYE2019: RM96.5 million) payables (current) because of reclassification from trade payables (non-current) and increase of PDC during FPE2020.
Loan and Loan and borrowings increased by RM26.0 million as we completed the acquisition borrowings of 100 acres land in Kuala Langat, Selangor.
Cash and cash Cash and cash equivalents were RM21.5 million (FYE2019: RM30.9 million) equivalents concurrent with outflow to finance the acquisition of land.
Total assets Although the Group’s total assets increased by RM120.2 million, profit for the period decreased by RM16.5 million, which resulted in return on total assets decreased to 4.4% (FYE2019: 6.4%).
Shareholders’ Shareholders’ equity grew to RM468.6 million concurrent with increase in net equity profit attributable to shareholders.
Dividend
On 23 October 2020, the Board of Directors of OIB had declared an interim single-tier dividend of 8 sen per ordinary share in respect of FPE2020. The interim dividend, which totalled RM12.4 million, will be payable on 31 December 2020.
Annual Report 21 2020 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations
Replenishment of Land Bank
The Board has always taken a prudent approach vis a vis its land banking with acquisition considered only when prospective lands are located near strategic locations within or near established areas guided by the Group’s strategic directive on the same.
The Group currently have 1,103 acres of strategic development lands that augers well for the future growth of its property development activities after the completion of the following land acquisitions by its subsidiary, Myra Land Sdn. Bhd.: i) On 1 July 2019, a piece of land measuring approximately 100 acres at District of Kuala Langat, Selangor Darul Ehsan, for a purchase consideration of RM40.1 million. This acquisition was completed on 3 February 2020; and ii) On 20 November 2019, another piece of land measuring approximately 4.698 hectare at District of Sepang, Selangor Darul Ehsan, for a purchase consideration of RM46.8 million. This acquisition was completed on 18 September 2020. This purchase also marks our first venture into Cyberjaya, in addition to our land parcels located in Rawang, Bandar Baru Salak Tinggi, Puchong, Dengkil, Puncak Alam and Kajang, all in the state of Selangor.
These acquisitions reflect the Group’s strategic direction of expanding its landbank at strategic areas and expand our current footprint that would spearhead continued growth going forward.
Completed Projects
During FPE2020, we have completed and delivered several projects and several phases of existing projects located in central and northern regions, marking the completion of a total of RM372.2 million in GDV and 975 units of development properties. With the completion of these projects, the Group already launched and will be launching new projects and phases of existing projects and continue to pursue land banking activities and joint venture opportunity for strategically located land with great connectivity and accessibility.
The list of development projects completed during FPE2020 is as per tabulated.
Types of Number of Estimated GDV % of take-up Projects development units (RM’ million) rate(1) CCC date(2)
Central Projects Seroja Hills Condominium 256 87.3 99 Jul 2019 Taman Seri Bestari 2-storey terrace 32 15.7 100 Jul 2019 (Phase 1A) Taman Seri Bestari 2-storey 16 12.6 94 Oct 2019 (Phase 1B) semi-detached Myra Meranti 3-storey terrace 31 23.3 97 Jan 2020 (Phase 1) Myra Meranti 3-storey terrace 53 43.7 89 Jan 2020 (Phase 2) Apartment Bestari Affordable 65 10.4 100 Jun 2020 (Selangorku) apartment Myra Saujana 2-storey 63 36.9 100 Aug 2020 (Phase 1) superlink terrace
Oriental Interest Berhad 199301017406 (272144-M) 22 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Completed Projects (cont'd)
The list of development projects completed during FPE2020 is as per tabulated. (cont'd)
Types of Number of Estimated GDV % of take-up Projects development units (RM’ million) rate(1) CCC date(2)
Northern Projects Taman SP Saujana 6A 2-storey terrace 101 42.8 89 Oct 2019 Taman Sinar Intan III (Phase 2C) (PPAM) 2-storey terrace 116 35.7 100 Oct 2019 Taman Serai Wangi (Phase 5B) (PPAM) 2-storey terrace 63 18.6 100 Nov 2019 Taman Delima 2-storey terrace 23 8.4 100 Feb 2020 Taman Permaipura (Zone A Phase 2) (PPAM) 1-storey terrace 89 17.7 97 Jul 2020 Taman Permaipura (Zone B Phase 2) (PPAM) 2-storey terrace 67 19.1 100 Jul 2020 Total 975 372.2
Notes: (1) Take-up rates were updated as at 31 October 2020. (2) CCC refer to Certificate of Completion and Compliance.
New Launches during FPE2020
During FPE2020, the Group launched new projects and new phases of existing projects in central region, namely Myra Putra, Myra Saujana (Phase 1B), Myra Meranti shoplot (Phase 1), Taman Seri Bestari 2 (Phase 1 & 3), Myra Alam (Phase 2A), Pulau Indah Industrial, Taman Belia Antarabangsa 2E(iii) and Myra Vista and in northern region, namely Taman Permaipura (Zone A Phase 3A & Zone C Phase 1), Taman Serai Wangi (Phase 6A), SP Saujana Permai (Zone A Phase 1), Taman Cenderawasih (Phase 1) and D’Aman Residence (Phase 1).
On-Going Projects
We are supportive of the Government’s initiative and calls for provision of affordable housing. In response, we have developed well-designed affordable homes for homebuyers under the Rumah Selangorku initiative. In October 2020, we delivered vacant possession to ecstatic home buyers of the 300-unit Dahlia Impiana Apartment. Recently, we launched the 394-unit Irina by Myra project in Puncak Alam.
Up in the northern region, we have launched new phases of existing PPAM (“Perumahan Penjawat Awam Malaysia”) projects, which offer 118 double storey terrace homes in Taman Sinar Intan III (Phase 2D), 137 double storey terrace homes of Taman Permaipura (Zone B Phase 3) and 198 double storey terrace homes of Taman Serai Wangi (Phase 6A) to civil servants.
Apart from the Pulau Indah industrial plots in Port Klang, shop-lots (commercial element of a mix development) and affordable housing homes, we had launched residential properties priced between RM440,000 to RM790,000 per unit for projects located in central region, and RM220,000 to RM420,000 per unit for projects located in northern region. We find that these price ranges are very acceptable to the mid-tier population particularly in the central region. Our Myra projects, developed in selected strategic locations, receive strong support from homebuyers and upgraders who are drawn to our aesthetically pleasing and yet functional home architecture built within a well-planned development.
Our unbilled sales stood at RM186.5 million as at 31 October 2020, which will be realised over the next 3 years, securing base revenue streams with clear earnings visibility until 2023. For all ongoing projects, we had updated the units sold until 31 October 2020.
Annual Report 23 2020 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Artist’s impression and description of the Group’s on-going projects are as follows:-
Central Projects
Dahlia Impiana is an affordable apartment located in Taman Dahlia, Bandar Baru Salak Tinggi, Sepang. Great for first home buyers, each unit comes with 3 bedrooms and 2 bathrooms. The project is surrounded by greenery within a growing community environment.
2017
AFFORDABLE APARTMENT
300
RM47.3 MILLION
99%
DPP 18 is a low-density project situated in Desa Pinggiran Putra. It consists of 18 semi-detached homes in an exclusive, low density neighbourhood that offers a lifestyle of freedom, elegance, and belonging to all who live there. With a garden of your own, a recreational park for your children, and space all around; DPP 18 is the community to be a part of.
2019
2-STOREY SEMI-DETACHED
18
RM14.0 MILLION
100%
RM6.2 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Oriental Interest Berhad 199301017406 (272144-M) 24 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Artist’s impression and description of the Group’s on-going projects are as follows (cont'd):-
Central Projects (cont'd)
Taman Seri Bestari is a 3-phase development situated in Bandar Baru Salak Tinggi, Sepang. This project comprises of double storey terrace and semi-detached homes and offers spacious living in a guarded community with a variety of recreational spaces including a fruit orchard and landscaped garden.
Phase 1 2019
2-STOREY TERRACE
38
RM21.7 MILLION
39%
RM4.6 MILLION
Phase 3 2020
2-STOREY SEMI-DETACHED
12
RM9.3 MILLION
50%
RM2.8 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Annual Report 25 2020 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Artist’s impression and description of the Group’s on-going projects are as follows (cont'd):-
Central Projects (cont'd)
The perfect balance between life and nature, Myra Alam is an individual title township located in Puncak Alam, a place known to be the next Damansara. So wake up to an environment that provides both great accessibility to the bustling city while being nestled within Mother Nature’s haven.
Phase 1A Phase 1B Phase 2A 2018 2018 2020
2-STOREY 2-STOREY 2-STOREY TERRACE TERRACE TERRACE
50 56 52
RM22.0 MILLION RM27.3 MILLION RM28.3 MILLION
98% 100% 56%
RM2.0 MILLION RM7.8 MILLION RM13.1 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Oriental Interest Berhad 199301017406 (272144-M) 26 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Artist’s impression and description of the Group’s on-going projects are as follows (cont'd):-
Central Projects (cont'd)
Myra Putra is a gated and guarded high-rise apartment on a Malay Reserve land in Desa Pinggiran Putra. With an emphasis on your joy and well-being, Myra Putra offers homes where you will be living your life in colours.
2019 RM60.2 MILLION
APARTMENT 98%
200 RM25.7 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Annual Report 27 2020 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Artist’s impression and description of the Group’s on-going projects are as follows (cont'd):-
Central Projects (cont'd)
Located in Sungai Merab, Dengkil, Myra Saujana bestows homes so sweet because that is where lives would meet. It is a place with a deep sense of community and one where your kids can grow and roam free.
Phase 1B 2019
2-STOREY SEMI-DETACHED
20
RM20.0 MILLION
50%
RM4.9 MILLION
2019 2-STOREY SUPERLINK TERRACE 56
RM37.7 MILLION
57%
RM14.6 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Oriental Interest Berhad 199301017406 (272144-M) 28 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Artist’s impression and description of the Group’s on-going projects are as follows (cont'd):-
Central Projects (cont'd)
Myra Vista is a low-density, individual title township built on a Malay Reserved land in Bandar Baru Salak Tinggi. An ideal home for urban living, this township meets the needs of growing families who is seeking for comfort and space to build a long lasting home.
2020
2-STOREY TERRACE
89
RM43.8 MILLION
An industrial project with estimated GDV of over RM431.8 million is situated on a 196.7-acre plot of land in Pulau Indah, Port Klang. It comprises of 41 industrial plots.
2020
INDUSTRIAL PLOT
41
RM431.8 MILLION
18%
RM62.7 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Annual Report 29 2020 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Artist’s impression and description of the Group’s on-going projects are as follows (cont'd):-
Central Projects (cont'd)
Located in the town of Pulau Meranti, Puchong, Myra Meranti's commercial phase features 18 shoplots in total with an estimated GDV of RM23.8 million. 17 of these shoplots are double-storey while the remaining of one being three-storey.
Phase 1 2020
SHOPLOT
9
RM11.9 MILLION
11%
RM0.6 MILLION
Taman Belia Antarabangsa gives buyers the chance to live amongst nature right by a forest reserve in Melaka without sacrificing accessibility to modern amenities and a vibrant township nearby. The development features beautifully landscaped areas surrounding a lake at the heart of a large multi-phase mixed development.
2020
1-STOREY BUNGALOW
32
RM28.2 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Oriental Interest Berhad 199301017406 (272144-M) 30 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Artist’s impression and description of the Group’s on-going projects are as follows (cont'd):-
Northern Projects
This project is strategically located along the Western Bypass and accessible through Sungai Petani South Interchange of the North-South Highway and also the Sungai Petani town. This PPAM project offers double storey terrace with unique contemporary designs.
Phase 2D (PPAM)
2018
2-STOREY TERRACE
118
RM37.0 MILLION
81%
RM9.2 MILLION
Built on a peaceful and tranquility neighborhood, Taman Bemban is strategically located in Pulai, District of Baling, Kedah. Comprising of 66 units well planned double storey terrace houses, it will be the perfect choice for those who crave for greenery and opt for a quiet retreat.
2019
2-STOREY TERRACE
66
RM22.0 MILLION
88%
RM6.5 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Annual Report 31 2020 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Artist’s impression and description of the Group’s on-going projects are as follows (cont'd):-
Northern Projects (cont'd)
Taman Permaipura is located in Sungai Petani with close proximity to the North- South PLUS Highway. The project offers single storey terrace and double storey terrace units with modern designs. Nearby amenities include golf & country clubs and a growing township.
Zone A Phase 3A 2019
1-STOREY TERRACE
60
RM13.6 MILLION
30%
RM1.5 MILLION
Zone B Phase 3 (PPAM)/ Zone C Phase 1 2019
2-STOREY TERRACE
137/123
RM39.1 MILLION/ RM37.0 MILLION
65%/24%
RM7.2 MILLION/ RM4.6 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Oriental Interest Berhad 199301017406 (272144-M) 32 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Artist’s impression and description of the Group’s on-going projects are as follows (cont'd):-
Northern Projects (cont'd) An integrated township that strives for modern living in Padang Serai, Kedah has both commercial and residential components. It is strategically located at the border of Penang and easily accessible through the Butterworth-Kulim Expressway and North-South Highway Bertam Toll Gate. This PPAM project offers single storey terrace to civil servants. Phase 6A (PPAM)
2020
1-STOREY TERRACE
198
RM32.8 MILLION
32%
RM8.0 MILLION SP Saujana Permai, located at Persiaran Amanjaya 5, along the Eastern Bypass near Sultan Abdul Halim Hospital, is a 7-phase development of 840 units of single and double storey cluster houses and 9 units of bungalows. SP Saujana Permai positioned itself as a residential place with secured living in beauty. This is the gated and guarded cluster community homes in Sungai Petani which is just right for you. The houses come with 16ft height ceiling concept which provide better ventilation and day light. (Zone A Phase 1) 2020
1-STOREY CLUSTER
117
RM40.5 MILLION
37%
RM4.5 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Annual Report 33 2020 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Artist’s impression and description of the Group’s on-going projects are as follows (cont'd):-
Northern Projects (cont'd) A home to call your own, for the comfort and safety of your loved ones. Live a life of convenience, enhanced with 24 excellent lifestyle facilities under one roof. Immerse yourself in spiritual well-being, with easy access to daily necessities, services and amenities. The spacious and functional layout giving you the freedom to design your space.
Block A 2020
APARTMENT
134
RM45.2 MILLION
This is a 8-acre development located in Kupang, Baling which feature 2 phases of 102 units of single storey semi-detached houses with total estimated GDV of RM29 million. Phase 1 consists of 58 units of single storey semi-detached houses with estimated GDV of RM17.1 million.
(Phase 1) 2020
1-STOREY SEMI-DETACHED
58
RM17.1 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Oriental Interest Berhad 199301017406 (272144-M) 34 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Projects launched after FPE2020
Artist’s impression and description of the Group’s projects launched after FPE2020:
Central Projects
A place where lifestyle, nature, and affordability are combined, brought forth Myra Gardens. A gated and guarded Strata township with an environment that focuses on health and wellness, it is a lifestyle with a price tag that you can afford.
(Phase 1C)
2020
2-STOREY TERRACE
96
RM44.5 MILLION
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Annual Report 35 2020 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Review of Operations (cont'd)
Projects launched after FPE2020 (cont'd)
Artist’s impression and description of the Group’s projects launched after FPE2020 (cont'd):
Central Projects (cont'd)
Presenting Irina by Myra: A Strata high-rise Rumah Selangorku apartment that is located in Puncak Alam in a gated and guarded community paired with greeneries and elegance as its key focus.
2020 394
AFFORDABLE RM66.9 MILLION APARTMENT
Launch Year Type No. Of Units GDV Units Sold Unbilled Sales
Oriental Interest Berhad 199301017406 (272144-M) 36 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Upcoming Central Projects
We are expecting several key launches of the following new projects and new phases Condominium of existing projects across central and 279 northern regions in the near future. The Cyberjaya new launches will remain at residential RM136.3 Million properties that are priced between Residence Target Q2 2021 RM250,000 to RM1,000,000 for central (Phase 1) region and RM170,000 to RM570,000 for northern region. Developed on a 11.6-acre of freehold land in Cyberjaya, Sepang; Cyberjaya Residence presents a lakefront low-density condominium that comprises of 700 units in total for the entire project.
2-Storey Terrace 2-Storey Superlink 65 Terrace/ 2-Storey Semi- RM39.0 Million Detached
Myra Alam Target Q1 2021 46/20 (Phase 2B) RM32.2 Million/ RM20.6 Million Located in Puncak Alam, Myra Alam is situated on a 35.6-acre plot of land with estimated GDV Myra Saujana Target Q2 2021 of RM300.0 million for a 6-phase residential (Phase 3) development. This project includes double storey terrace homes, condominiums and Rumah Developed over a freehold land the size of 51 acres Selangorku apartments. in Sungai Merab, Myra Saujana features a 7-phase development that includes semi-detached and superlink homes, Rumah Selangorku initiative, and an apartment. 2-Storey Terrace
128 Desa Affordable Apartment Myra RM60.2 Million Pinggiran 502 Gardens Target Q1 2021 Putra RM125.5 Million (Phase 1D) Rumah Target Q3 2021 Located in 70.5-acre development located in Kundang, Myra Garden’s GDV is estimated at about Idaman RM500.0 million. It will be developed over 7 phases Desa Pinggiran Putra Rumah Idaman is a high-rise to feature double storey terrace homes, lake view affordable housing development that is located on terrace homes and 4 types of Rumah Selangorku leasehold land of over 9 acres in Desa Pinggiran apartments, 1,203 units in total. Putra.
Type No. Of Units GDV Launch Year
Annual Report 37 2020 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Upcoming Nothern Projects
2-Storey Semi-Detached/ 1-Storey Cluster 2-Storey Terrace SP Saujana 54/126 111 Permai RM42.6 Million SP Saujana RM77.8 Million (Zone A Sapphire 2 Target Q2 2021 Phase 2) Target Q2 2021 Sapphire 2, is a residential individual title Situated on a 133.1-acre and in Sungai Petani, development that has the perks of being gated and Kedah; Saujana Permai is a 7-phase residential guarded. Located in Sungai Petani, Kedah, Sapphire development. Phase 1 was launched in April 2020 2 is conveniently located just 10 minutes away from consisted of 117 homes with an estimated GDV of the most favoured mall in Sungai Petani. RM40.5 million.
Sapphire 2 is a 2-phase development and is currently Condominium at its second phase with a total of 180 units comprising of double storey semi-detached homes 135 and double storey terrace homes. D' Aman RM50.4 Million 1-Storey Terrace Residence Target Q3 2021 Taman 80 (Block B) Serai Wangi RM13.3 Million Located in the heart of the city centre of Alor Setar, Kedah, D’Aman is OIB’s newest residential condominium development in town that offers an (Phase 6B) Target Q1 2021 entirely new living experience with its facilities and (PPAM) 3-tier security. An integrated township that strives for modern living in Padang Serai, Kedah has both commercial The project, which houses 404 condominium units and residential components. It is strategically split across 3 blocks, with a total estimated GDV of located at the border of Penang and easily accessible RM146.0 million. through the Butterworth-Kulim Expressway and North-South Highway Bertam Toll Gate. This PPAM project with GDV of RM46.0 million offers 278 units of single storey terrace homes to civil servants. Taman Permaipura (Zone A Phase 3B) (Zone B Phase 4) (PPAM) (Zone C Phase 2)
1-Storey Terrace 2-Storey Terrace 2-Storey Terrace
52 67 72
RM11.3 Million RM19.1 Million RM21.5 Million
Target Q2 2021 Target Q3 2021 Target Q4 2021
Taman Permaipura is located in Sungai Petani with close proximity to the North-South PLUS Highway which offer single storey terrace and double storey terrace units with modern designs. Nearby amenities include golf & country clubs and a growing township.
Type No. Of Units GDV Launch Year
Oriental Interest Berhad 199301017406 (272144-M) 38 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)
Risk Management The Covid-19 pandemic has a profound impact on the property industry. The industry, already fragile and hobbled by challenges from oversupply to stringent end-lending policies, affordability, weak market sentiments as well as uncertainties in both domestic and global economy, was made worse by the pandemic. As for the Group, we fared better. The spill-over effect from our focus last year on strategic planning, improving operational efficiency and strengthening internal controls through digitisation, building up talent management and strengthening an integrity-focused work culture has been crucial in future proofing and seeing the Group through the risks and challenges brought on by the pandemic.
A direct result of these initiatives is a strong financial base, with a robust balance sheet, and net cash as at 31 August 2020 of RM21.5 million (FYE2019: RM30.9 million) with outflow during the period under review to part finance acquisition of land. This means we still have a strong cash positive balance sheet to withstand any impact of the pandemic that we are all now experiencing as a resurgence, in selected locales nationwide, is raging. Nonetheless, we have sought to reduce variable costs, and to preserve cash, where possible. This includes active measures to curtail unnecessary revenue expenditure and managing receivables within credit term. We have been managing our cash flows closely. As a start, our 4-step home ownership journey process has enabled both home buyers and us to anticipate issues and address them progressively thus ensuring swift closure of home sales. Our teams are able to tap on our system to track status of construction vis a vis progressive billings and receivables to minimise delay that could negatively impact recovery of receivables.
Our digital transformation has been accelerated and has resulted in a robust system able to support remote working thus validating our employee safety first initiative. Many employees were able to work effectively from home safely during the lock down. Another plus point to our digital innovation is data driven insights into our development projects which help to inform us on product development and new launches. Additionally, migration, integration and application of Industrial Building System (IBS) which shorten construction time, minimise waste and reduce construction costs enable us to pass savings down to home buyers. Prospects and Outlook In its Economic Report 2020, the Finance Ministry anticipated domestic economy to contract by 4.5% in 2020 with the contraction mitigated by the introduction of a RM250 billion stimulus packages to support the people and revitalise the economy by shoring up consumer sentiment, spur local spending and support domestic businesses. The positive impact of these packages is anticipated to have spill over effects and provide an additional boost to the economy in 2021. The Malaysian economy is further projected to rebound between 6.5% and 7.5% in 2021, supported by strong economic fundamentals and well-diversified economy with the proviso that the favourable outlook hinges on two major factors - the successful containment of the pandemic and sustained recovery in external demand.
During this period of still wider macro-economic uncertainties, the niche market for affordably priced homes like ours has proved to be resilient with house prices being stable. Given the recent announcements of approvals from governments for the deployment of vaccines to contain the pandemic, we can begin to hope for brighter days ahead while still being mindful of the still weak overall sentiment and restrictive lending practices.
As we look to welcoming the new year 2021, our unbilled sales, which totalled RM118.1 million as at FPE2020 and growing, should provide good earnings visibility in the short to medium term. We are very supportive of the stimulus packages which have helped to galvanise interest in affordably priced residential properties, ours inclusive. We are indeed heartened as these initiatives will be beneficial to first time home buyers. Further, Bank Negara Malaysia’s decision to stay the lower overnight policy rate leading to lower effective interest rate for home loans have spur purchasers looking to upgrade/own a new home. We have noticed an upswing in market sentiment in the past 3 months, attributed to lower bank interest rates and increased affordability in home ownership. In turn, we are revisiting our development plans to accelerate the launch of more of our specialty, beautifully designed and functional while affordably priced homes.
Whilst we are still on the lookout for the right opportunities to increase our landbank which is at around 1,860 acres presently, any acquisitive move will be made in a disciplined manner with an eye towards preservation of liquidity and balance sheet. Prudent financial management would be key to ride out this economic crisis.
Our business operating model recognises the vagaries of the housing market and the operating risks of our complex long-term development projects by focusing on product quality and innovation and customer service while keeping financial risk low which enables investment at the right time. This approach has stood us well and makes possible the delivery of strong (risk adjusted) returns to our shareholders whilst having positive impact to our customers, other stakeholders and the communities where we operate.
Annual Report 39 2020