[Ekovest (8877) -AGM]
Q&A Time:
✅ Q: In Note 18 of the annual report, what is the purpose of the money about RM40.6 million held by the stake holder? What is the current status?
A: This amount is held in accordance with the requirements of the Housing Developer Act (HDA) for our EkoCheras program. This amount can only be released after 18 and 24 months of the EkoCheras C.C.C date. This money is currently deposited in the account of the stakeholder MTrustee.
✅ Q: In Note 37 of the annual report, there is a contract cost written off up to RM17million. Is it related to the failure to sign a contract? Can management guarantee that such write off will not occur in the future?
A: We will do a lot of research and investigation before accepting or proposing a contract to the government, which will result in some pre-contract costs. If there is no activity after 2 years, the company's finances will write this amount off. But if the plan is launched in the future, this money will be re-incorporated into related projects. Hence this does not mean that we failed to sign the contract. Due to the importance of money, we cannot remove it financially.
✅ Q: The company has 5% to 10% transfer in RPGT. Does the company sell any property?
A: This is just a one-time transfer. The reason is to match the fair value gain of our industry, so there is no transaction.
✅ Q: The company has an investment of nearly RM3.5billion which only provides 3% interest return, while the total loan is as high as RM6billion and 6% of the interest needs to be repaid. Why not use 50% cash to pay down debt to reduce interest costs? Isn't this a better way to deal with cash flow?
A: We are aware of this, and we also inform you that debt will be reduced. The current total debt has actually been reduced to 54%. Some loans have fixed repayment dates so they cannot be settled immediately. In addition, as a construction company, the company needs to retain a cash as a raw material to buy when the price is low, in order to increase the company's profit margin.
✅ Q: What are the chances of selling the expressway?
A: The government has made it clear that it will acquire most of the highways, but will focus on important highways first. DUKE Boulevard offers higher-end facilities, so only a portion of those willing to use it will pay. So far we have not received any offer from the government.
✅ Q: When is the completion of DUKE3 Avenue? What impact does MRT and public transportation on highway toll revenue?
A: We are always paid attention refer to the matter and have been take into considered for construction of DUKE. After several of research, cars are still the main mode of transportation. The company also found that in some cities a family has at least 4 cars, so the expressway is still very profitable. Based on the current situation, DUKE3 is expected to be completed in November 2020.
✅ Q: Why did the company buy a 30% stake in PLS Plantations? What benefits does this have for the company?
A: Owning this 30% equity can bring more than 1,000 acres of land to the company. 30% of the land is related to the palm industry, and the remaining 70% can be opened to other plant species. This will be a long-term investment that matches market trends. Most of the land is now used to grow durians, and we are actively developing downstream businesses and looking for partners. In addition, we understand that the plantation industry cannot consolidate sufficient product intake, resulting in high costs and low profit margins, so we have begun to engage with some downstream industries in China to bring demand for our products.
✅ Q: In the recent news about the company buying 10 pieces of land in Johor from IWH, why did you buy them?
A: We will develop and build this land as an industrial development. More details will be notified in the upcoming EGM.
✅ Q: Will EKOVEST join Bandar Malaysia?
A: Ekovest is a company in development & construction, and management is interested in participating in this project. Ekovest will be a very good choice for IWCITY in Malaysia.
✅ Q: 3 years ago, there was a plan to list the company that is the DUKE Highway on BURSA. What is the progress?
A: This is still ongoing. The previous government strongly supports the provisions stated in its RIA agreement. If the company goes listed, the government will own a certain percentage of the shares. However, progress is still under review as the new government takes over. We have 7 years to decide whether we want to go listed, and we will wait for the government's turmoil to subside before continuing.
✅ Q: Although both income and profits have increased, the dividends remain the same. Will the company pay more dividends next year?
A: The board will investigate and make appropriate adjustments.
Louis Yap
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https://klse.i3investor.com/blogs/LouisYapInvestment/2020-02-11-story-h1483763562-Ekovest_8877_AGM.jsp
