ENRA Group Berhad Annual Report 2019

17 ENRA GROUP BERHAD ∞ Annual Report 2019 page Premised on the foregoing, this division reported an annual revenue of RM2.9 million in FYE 2019 compared to RM16.8 million in FYE 2018, and a loss before tax (“LBT”) of RM8.6million due to the RM9.3millionwrite down in PortlandChambers. Excluding the Exceptional Items, PBT would be RM0.7 million compared to a PBT of RM2.6 million in FYE 2018. As at 30 June 2019, we have a balance of 10 residential units in Shamelin Star with a net realisable value of approximately RM7.0million. Most of the units will be fitted out to improve the marketability of the units in the current challenging property landscape. Portland Chambers was completed recently in February 2019 and has already sold its two largest units in the financial year of 2020. Interest in the other two smaller units remains strong and we anticipate sales to contribute significantly to this division’s the financial year of 2020 revenue. Property Development Division’s Financial Performance Property development will remain one of ENRA’s two key businesses. Fundamentally, we are of the view that demand for properties in the Klang Valley at the right market prices, though further away from the Kuala Lumpur city centre, remain stable and that the recent reduction in the overnight policy rate will have a positive effect on the market’s activity. Premised on the foregoing, ENRA Land Sdn Bhd (“ELSB”), our wholly-owned subsidiary had entered into a shareholders’ agreement on 31 May 2019 to acquire a 51.0% stake in Q Homes Sdn Bhd with IBGH Capital Sdn Bhd holding the remaining 49.0% stake. Q Homes Sdn Bhd’s objectives are to develop quality homes in new growth areas in the Klang Valley that the majority of the market can realistically afford under the current economic environment. In United Kingdom, property is still a liquid and attractive asset class, but we are also exploring developments with unique selling characteristics in niche but growing markets to manage risks pertaining to the general residential open market. As such, on 27 March 2019, ELSB entered into a shareholders’ agreement to acquire a 51.0% stake in Abode Senior Living Ltd, which in turn acquired a 1.8 acres land in the Rugby city centre for the development of a retirement homes living estate. The estimated gross development value of the project is approximately GBP30.0 million. ENGINEERING, CONSTRUCTION & FABRICATION (“ECF”) DIVISION This division’s FYE 2019 revenue is RM4.5 million, down from RM11.7 million. Most of this division’s activities revolved around design and engineering services for the oil & gas industry. This division reported a LBT of RM15.9 million in FYE 2019 (FYE 2018: RM2.7 million) after taking into account the impairment loss on the remaining outstanding amount that EEFAB is claiming from Gemula Sdn Bhd. Excluding the impairment that is an Exceptional Item, this division would have reported a LBT of RM0.7million. RM120.2 mil RM16.8 mil RM2.9 mil RM0.7 mil RM33.3 mil FYE 2017 FYE 2018 Revenue PBT excluding Exceptional Items FYE 2019 RM2.6 mil Management Discussion and Analysis