Extracted from Annual Report 2015
Dear Valued Shareholders,
On behalf of the Board of Directors of YNHP, I hereby present the Annual Report and Audited Financial Statements of the Company and its subsidiaries ("Group") for the financial year ended 31 December 2015.
The year under review had been a challenging one due to a more competitive playing field together with cooling measures being enforced by the central bank to reduce speculation in the property market in Malaysia. Furthermore, Malaysia's economy also suffered with the negative outlook on the Ringgit and also negative news by media.
The above negative outlook added further pressure and challenges to the property sector in Malaysia.
However, notwithstanding the challenges faced by the Company, I am pleased to report that YNH Property Bhd ("YNHP" or the "Company") managed to stay profitable with YNHP Group registering a total revenue of RM306.5 million in the Financial Year Ended 31 December 2015 ("FYE 2015") and Profit Before Taxation ("PBT") of RM25.1 million for FYE 2015.
For the financial year ended 31 December 2015, the Company had continued to focus on its projects in the Klang Valley and also in Seri Manjung.
The 6-acre mixed/development project in Mont Kiara, Kiara 163, was re-launched early 2015 had managed to get an encouraging take-up rate for the Small Office Versatile Office ("SOVO") commercial units.
The Kiara 163 Retail is also marketed by a leading retail consultant with a few international brands coming in as the anchor tenants. The concept for the Kiara 163 Retail is a lifestyle neighborhood mall for the convenience of the residents surrounding Mont Kiara.
In terms of the stage of construction, the Company had completed the substructure works and is currently working on building the superstructure for the Retail and also the SOVO as Phase 1. The Hotel Suites will be part of the 2nd Phase of the project.Sfera Residensi, Puchong South>
The project in Puchong South called Sfera Residensi is one of the project that the Company is focusing on in the Klang Valley. This project is targeting a different group of purchasers/ buyers due to its attractive pricing. It is also part of the Company strategy to foray into the medium cost apartments range due to the more difficult and challenging economic conditions.
Sfera Residensi, though priced attractively, is very well located next to Giant Hypermarket in Seri Kembangan and also the retail shops nearby. It is also accessible to a number of highways, namely, the NKVE, LKSA, SILK and more recently a new access to the MEX highway. Further, the proposed MRT extension will include a station next to the development.
The sales have been very encouraging for both the commercial shop offices and the apartments.
The piling and substructure works for the project had already been completed. Currently, the Company is busy focusing on the superstructure works for this project.Development Projects in Perak
The Group's other current on-going projects in Perak include Taman Desa Manjung, Desa Manjung Point, Pusat Perniagaan Manjung Point 3, Taman Sejati, Medan Makmur Jaya and Manjung Apartment.
For the year 2015, sales contribution were mainly derived from the progressive sales of Fraser Residence Kuala Lumpur, commercial properties at Manjung Point Township (adjacent to AEON Shopping Mall), progressive sales of inventories in Ceriaan Kiara (Mont Kiara, Kuala Lumpur) and progressive sales of development projects in Manjung Point Township.
Sales from the Company's projects such as the balance units of Fraser Residence Kuala Lumpur (188 Suites), Kiara 163, Sfera Residensi, Manjung Commercial Shoplots and Manjung Point Township residential units (Seri Manjung, Perak) will continue to contribute strongly to the Group's income. As such, the Board is cautiously optimistic of the Group's prospect for 2016.
Balance units from the Fraser Residence development in Kuala Lumpur is still being marketed and is expected to continue to contribute to the Group's earnings in 2016.
The Board is optimistic of our Kiara 163 mix development project, with a total internal targeted GDV of approximately RM1.2 billion, will contribute positively to the Group's earnings in 2016 and also for the next few years.
The Board is also optimistic of another project in the Klang Valley, Sfera Residensi in Puchong South, a medium cost residential apartment of 483 units will continue to have good sales due to the attractive pricing and also good accessiblity.
The internal targeted GDV for Sfera Residensi is approximately RM425 million. The Board is confident that this development will contribute positively to the Group's earnings in 2016 and the next few years.
Furthermore, the Group's township development in Seri Manjung of approximately 700 acres will continue to contribute to the Group's profit for the next 20 to 30 years.
In addition, with AEON Seri Manjung and Pantai Hospital Seri Manjung currently fully operational together with the planned development of an international school, this will further improve the value of the Company's existing and future developments of this township.
Last but not least, a prestigious project planned for the immediate future by YNHP is the Menara YNH development. The commercial development sits on approximately 3 acres of land on Jalan Sultan Ismail, which is located within the Golden Triangle area of Kuala Lumpur city centre. The location of Menara YNH offers easy accessibility and close proximity to public transport facilities. This development has an internal targeted GDV of approximately RM2.3 billion. The Menara YNH mixed development will comprise of the following mix, hotel, service apartments and shopping mall. Contribution from this project which includes rental income is expected to contribute positively to the Group's future earnings.
Currently, the Company is making revision to the components of this project which will include service apartments and hotels. The Company had also on 4 February 2015 entered into a MOU with Hilton Group of companies to build a Hilton City Centre on this land. The Board is confident that the Hilton Group will be a good brand for the project.
On behalf of the Board, I would like to thank the management team and all employees for their continuous effort, commitment and support during the year. I would also like to express my appreciation to our valued customers, bankers and other business associates for their support and co-operation. To our valued shareholders, I would like to thank them for their faith in us.
Last but not least, I would like to extend my sincere appreciation to my fellow Board members for their continued support, guidance and contribution to the Group.
DATO' DR. YU KUAN CHON, DIMP, PPT, MBBS