TOURISM-RELATED property developer Yong Tai Bhd saw its net earnings widened to RM121.54 mil for its 3Q FY6/2022 ended March 31, 2022 on the back of an impairment loss of RM117.9 mil.
Year-to-date (YTD), the company’s impairment losses have accumulated to RM198.5 mil, reflecting the adverse impact of COVID-19 pandemic on both its tourism and property development businesses.
A filing with Bursa Malaysia today shows that the impairment loss amounted to RM71.12 mil for its hotel building post completion of construction, and RM56.42 mil for inventories and other receivables of the group.
Furthermore, the change of strategy to maximise the utilisation of theatre has also resulted in an impairment of RM71 mil on its Encore Melaka-related intangible assets.
In conjunction with the re-opening of Encore Melaka on April 30, Yong Tai expects the change in strategies towards a broader range of live entertainment, art and cultural shows by leveraging its state-of-the-art Encore Melaka theatrical capabilities to help transform the facility into a one-stop solution for all event staging needs and even cater for outdoor activities, marketing and ticketing sales.
“We are confident that this new positioning will drive recovery for our Encore Melaka theatre business,” commented Yong Tai’s CEO/executive director Datuk Wira Boo Kuang Loon.
Aside from that, the group will also focus on completing all its on-going development projects, including Amber Cove and Impression U-Thant which are on track to complete and deliver vacant possession by 3Q and 4Q 2022.
“With a total unbilled revenue of RM271 mil as of end-March this year, the property development segments shall provide earnings visibility to the group over the next two financial years,” projected Boo.
As for the progress of Yong Tai’s venture into vaccination distribution, he said the group will explore the distribution of other healthcare products to generate a diversified revenue stream as Malaysia has already achieved a high vaccination rate.
Meanwhile, the group’s gold mining operations have seen another positive development as the exploration and preparation works have been completed. Projected to commence production by end-May, this will contribute positively to Yong Tai’s financial results for the financial year ending June 30, 2022.
“What we have seen over the last two years is the structural impact on the tourism and property development business amidst the pandemic. Aside from looking for other business opportunities to diversify the group’s revenue streams, we continue to focus on our core business in property development,” Boo pointed out.
“As the property market was affected by the COVID-19 pandemic, this offers an opportunity for the group to look for strategic land acquisition and joint venture partners for future development projects.
“With the re-opening of international travels and progress seen in our diversification strategies, we are cautiously optimistic that we are on the right track to return to profitability.”
At the close of today’s market trading, Yong Tai was down 0.5 sen or 7.69% to 6 sen with 9.64 million shares traded, thus valuing the company at RM84 mil. May 26, 2022
