Encorp hopes for better financial year 2025, driven by new developments in Kuantan, existing foothold in Johor's trade zone
Chairman Mohd Yusmadi Mohd Yusoff said the improvement will be driven by new developments in Kuantan, as well as the company's existing foothold in Johor's trade zone.
'If this year we can chart anything around RM10 million, I'd be more than happy. For me, change has to be gradual,' he told SunBiz in an exclusive interview.
Appointed on Sept 29, 2023, Mohd Yusmadi – a lawyer and former senator – now leads the company that is 62% owned by Felda Investment Corp Sdn Bhd.
'As Felda's builder, with projects stretching from Perlis to Sabah and even abroad, we must leverage this affiliation. Felda is a significant group. At the same time, we need to adopt AI and technology to remain competitive.'
Mohd Yusmadi said Encorp stands to benefit from the upcoming Johor-Singapore Special Economic Zone given its existing landbank in the area.
'I want Encorp to focus more on the economic zone. We still have a few units left over there, but that can be a good start. Compared to other developers, we are not a fresh or new player there. We already have one leg there.'
Encorp's landbank in Johor includes the Encorp Marina Puteri Harbour development, which occupies about 3.3 acres of prime waterfront land along the Straits of Johor .
Mohd Yusmadi said the group's five-star hotel project in Kuantan, developed in partnership with Touch Group – with a gross development value of over RM500 million – is already progressing.
'In Balau we are pushing for a five-star hotel and serviced apartments with Touch Group. We are now in discussions with a few potential partners,' he disclosed.
Encorp has faced governance-related issues and operational setbacks in recent years.
Mohd Yusmadi said there is no compromise when it comes to integrity and governance under his leadership, .
'I say it, I practise it, and I show it. That's why last year, as many people were informed, yes, we did have governance issues. But I want to send a message to the media, investor, and our shareholders – under my leadership, governance is a priority.
'Maybe because I'm a former politician, I understand the role of government.'
From a capital appreciation perspective, Mohd Yusmadi said Encorp had faced several governance-related challenges, which the leadership team has worked to address through firm top-level commitment. 'For example, the issue of uncollected tenancies involving millions of ringgit.'
He added that governance was his first transformation strategy upon taking the helm, and the impact is now becoming evident.
'For the first time since 2016, Encorp turned a profit, as shown in last year's financial report. We even gave bonuses to both executive and non-executive staff.'
Encorp posted its first annual profit since 2016 in FY24, recording RM3.4 million in net profit, compared with a net loss of RM8.5 million in the previous year.
The improved performance was attributed to higher gross margins, with RM79.3 million gross profit on RM104 million revenue; a significant reduction in cost of sales, down to RM24.7 million from RM57.2 million in FY23; and better control of finance costs coupled with the recovery of longstanding receivables.
The group posted a profit before tax of RM6.1 million despite a revenue decline to RM104 million from RM129.2 million in FY23, mainly due to weaker performance in the property development segment.
'Maybe it's my lack of property background that became an advantage. I came in with a fresh perspective. As a senior lawyer who often troubleshoots corporate issues, I bring a strong problem-solving mindset,' Mohd Yusmadi said.
He noted that Encorp retained all its staff throughout the Covid-19 period. 'Our HR department confirmed that we didn't let go of anyone during the pandemic. That sends a strong signal to the public that Encorp is a stable and promising company.'
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