Wednesday, November 30, 2011

Faber Group sinks into the red in 3Q

KUALA LUMPUR (Nov 30): FABER GROUP BHD [] posted net losses of RM26.87 million in the third quarter ended Sept 30, 2011 compared with net profit of RM29.01 million a year ago.

It said on Wednesday the losses were mainly due to the recognition of costs amounting to RM44.5 million for works completed for the projects in the United Arab Emirates (UAE) where the corresponding revenue was not recognised as it could not be measured reliably.

Faber said the loss per share was 7.4 sen compared with earnings per share of 7.99 sen.

Faber said revenue rose 34.1% to RM309.39million from RM230.69 million a year ago. The main reason was the higher revenue from integrated facilities management (IFM) non-concession projects in UAE.

'The recognition of RM107.7 million revenue was on the work orders issued prior to the expiry of contracts where works and documentation for invoicing were fully completed post expiry of the contracts,' it said. It added the final amount of revenue would be determined upon the final acceptance by the principal, Western Region Municipality (WRM), with whom negotiation is currently ongoing.

Its property division recorded higher revenue by RM39.8 million mainly due to the launch of new projects in fourth quarter 2010 and first quarter 2011. The IFM concession also recorded higher revenue by RM1.9 million due to higher variation orders and additional new facilities at the government hospitals within Faber Group's concession area.

Faber also said group revenue for 3Q of RM309.4 million was 66.0% or RM123.0 million higher than 2Q's RM186.4 million. The main reason was the higher revenue from IFM non-concession projects in UAE. The recognition of RM107.7 million revenue was on the work orders issued prior to the expiry of contracts.

For the nine-month period, its earnings fell sharply to RM3.78 million from RM75.87 million in the previous corresponding period. Its revenue was 1.3% higher at RM694 million from RM684.89 million.

'Property division and IFM concession recorded a positive variance of RM73.4 million and RM17.4 million respectively. IFM non-concession recorded negative variance of RM81.7 million as a result of the non-renewal of contracts for infrastructure and low cost houses maintenance in UAE,' it said.

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