Country View Bhd has deferred the launch of Aurora Sentral in Johor to the next financial year 2021, given the Covid-19 global pandemic, despite getting the financing facilities in place for the development.
Even then, the group will monitor the prevailing up-to-date market conditions before launching the RM1.26 billion development.
Aurora Sentral in Iskandar Puteri, features resort link villas, three-storey semi-detached shops, and the development of other commercial projects.
Country View's wholly-owned subsidiary Country View Resources (CVR) Sdn Bhd acquired 66.34 hectares of land to develop Aurora Sentral for RM310 million in 2017.
In February this year, Country View said CVR had accepted a wholesale term financing-i of RM20 million from United Overseas Bank (Malaysia) Bhd to part financing up to 80 per cent of the initial mobilisation or development cost to build 464 units of resort link villas and 182 units of three-storey semi-detached shops at Aurora Sentral.
Then in May, Country View accepted RM31 million in Islamic financing from AmBank Islamic Bhd, whereby CVR would redeem RM22 million for working capital purposes and an RM9 million bank guarantee.
CVR had also accepted the renewal of existing banking facilities and a new banking facility from Hong Leong Bank Bhd. It signed up for an RM8 million overdraft facility from Hong Leong, while maintaining an RM10 million fixed-term loan and RM1.25 million revolving credit facility.
Country View said market conditions will remain tough and more challenging for the rest of its financial year ending November 30, 2020 (FY2020).
"The group remains cautious and vigilant in view of the new impact and challenges arising from the Covid-19 global pandemic and the movement control order (MCO) put in place on top of the existing continued stringent lending requirements by the financial institutions.
"There's also intense competition among developers and weak market sentiments," it said in a filing with Bursa Malaysia yesterday.
Country View said its revenue and performance for FY2020, will be driven by landed residential and commercial properties in on-going developments.
The properties include three-storey cluster homes, three-storey superlink terraced houses, three-storey semi-detached units, and three-storey shop offices.
It also expects contribution to come in from its One Sentral serviced residence, the affordable homes under the Rumah Mampu Milik Johor and Perumahan Komuniti Johor schemes, and from the sale of three-storey semi-detached homes at Taman Nusa Sentral.
Country View, whose landmark projects include Taman University, Taman Nusa Indah, and Nusa Bestari Jaya, has been developing Taman Nusa Sentral, a 121ha area in Iskandar Puteri, since 2010.
It hopes the recent stimulus measures announced for the property sector like the re-introduction of the home-ownership campaign with a waiver of stamp duties on instruments of transfers and loan agreements for properties priced between RM300,000 and RM2.5 million, the exemption of real property gains tax for individuals, and the lifting of the 70 per cent maximum loan-to-value ratio for third property financing will improve the market.
Country View registered revenue and pre-tax profit of RM18.4 million and RM6 million respectively for the second quarter ended May 31, 2020, as compared to the revenue and pre-tax profit of RM33.7 million and RM6.3 million respectively in the preceding year corresponding quarter.
It said the revenue and pre-tax profit were mainly derived from the property development division.
Revenue and pre-tax profit fell by 46 per cent and five per cent respectively as compared to the preceding year corresponding quarter after taking into account the effects of the Covid-19 pandemic, the MCO and the conditional MCO.
Country View said revenue had declined mainly due to a lower number of properties that were sold as well as lower contributions from work done on the properties under development as construction activities were halted during the MCO.
Pre-tax profit for the current quarter as compared to the preceding year corresponding quarter declined only slightly as it sold properties that yielded a higher margin.
