Talam sinks into red in 3Q, net loss RM83.29m

Talam Corp Bhd posted net loss of RM83.29 million in the third quarter ended Oct 31, 2010 compared with net profit of RM118,000 a year ago, mainly due to losses on disposal of two parcels of development PROPERTIES [] totaling RM43.85 million and foresees a challenging remaining financial year for the group.

The company said on Thursday, Dec 30 there was an increase in administrative expenses mainly due to allowance made on bad and doubtful debts of RM3 million.

“The higher finance cost is attributable to finance cost accounted on zero coupon convertible securities, which were issued pursuant to the regularisation plan undertaken by the group in the previous financial year,” it said.

Talam said revenue fell 32% to RM50.68 million from the RM74.72 million a year ago mainly due to lower progress billings generated from the development projects during the current quarter under review. It posted loss per share of 2.76 sen versus earnings per share of 0.01 sen a year ago.

For the nine-months period, revenue declined 30% to RM125.30 million from RM178.10 million mainly due to lower progress billings generated from the development projects.

Talam reported loss before tax of RM74.23 million for the nine months compared to profit before tax of RM9.53 million a year ago. The unfavourable results were mainly attributable to losses on disposal of two parcels of development properties totaling RM43.85 million, allowance made on bad and doubtful debts of RM3 million and operating loss reported by Maxcourt Hotel in China of RM4.7 million.

“All these factors have aggravated the results of the group despite a higher amount of other income which include, among others, income arising from waiver of obligations under a settlement agreement with creditors of RM35.8 million and gain on disposal of certain floors of a hotel building in China of RM4 million,” it said.

On the prospects, Talam said the group wass still facing a huge challenge in the low and medium end property sector. Due to its tight liquidity position, the group had during the current financial year, disposed of certain properties below cost and this may continue in the near future. - by Joseph Chin of theedgemalaysia.com