SHAH ALAM, Jan 14: Loss-making electronic and electrical product maker Astral Supreme Bhd (ASB) expects to return to the black for the financial year ending May 31, 2016 (FY16), with the help of its diversification into construction, property development and property investment activities.
Its newly appointed managing director and executive director Datuk Ng Aun Hooi told reporters at its EGM yesterday, the group intends to cease its electronic manufacturing services (EMS) division and focus on its new business going forward.
“Manufacturing is a sunset business and has actually become a liability to ASB. We are now waiting for the answer from the authority and expect to complete the process within three to four months,” said Ng.
He noted that the group’s order book currently stands at RM110 million, comprising 80% of the construction contracts with the government, that will keep it busy until 2017.
Ng said the group is also tendering for six private and government projects, which is worth more than RM350 million.
“With all of these (projects) in, we should not have any problem to turnaround. And we are expecting more (projects) to come,” Ng added.
For the first quarter ended Aug 31, 2015, ASB made an unaudited net loss of RM833,000, due to lower sales and performance of its EMS segment, acceleration of work done in the previous quarter under the work programmed for construction projects, and higher administrative expenses.
The group made revenue of RM10.25 million during the quarter, mainly contributed from its construction activities, which makes represents approximately 98.87% of the total turnover.
In March 2014, ASB ventured into the construction sector via its subsidiary Astral Supreme Construction Sdn Bhd (ASC), by undertaking two subcontract works worth RM105 million for design and build and associated works for a Projek Perumahan Rakyat (People’s Housing Programme or PPR) project in Ayer Panas and Paya Rumput, Malacca.
Ng said the PPR project in Malacca will be completed within the next two months.
Last year, ASB commenced work for three subcontracts worth RM119.03 million for PPR projects in Tawau and Kota Belud, Sabah, which is expected to be completed within 24 months.
Based on the contract value of the PPR projects of RM224.03 million, the group expects the PPR projects to contribute 25% or more to its net profit in the future.
Going forward, Ng said the group is looking to acquire more landbank in Kelantan and Sabah area.
Ng however, declined to disclose the group’s total landbank currently.
— THE SUN