KUALA LUMPUR (Nov 7): Crescendo Corp Bhd is divesting of seven parcels of adjoining land in Pulai, Johor to a data centre operator for RM117.02 million cash to boost its cash flow for other development projects.
Crescendo’s wholly owned unit Panoramic Industrial Development Sdn Bhd entered into agreements for the disposals with STT GDC Malaysia 2 Sdn Bhd, a data centre operator wholly owned by Singapore-incorporated STT Malaysia DC Pte Ltd.
STT GDC Malaysia’s directors include Bruno Lopez, who is also the deputy chief executive officer of Temasek-backed ST Telemedia.
Bruno is also the president and group CEO of ST Telemedia’s data centre arm ST Telemedia Global Data Centres.
While Crescendo did not disclose the ultimate shareholder of STT Malaysia DC, a search with Singapore’s Accounting and Corporate Regulatory Authority showed that the unit shares the same address as ST Telemedia.
Crescendo, which is 70% controlled by the founding Gooi family, disclosed that the parcels of land were acquired in December 2009 for a total of RM15.93 million.
The transactions are expected to be completed through the fourth quarter of next year.
Crescendo’s net profit dropped 25% to RM17.48 million for the first half ended July 31, 2023 (1HFY2024), from RM23.31 million a year ago, due to lower sales, coupled with profit margin compression amid changes to its sales mix, with a higher proportion of affordable housing property.
Revenue fell 4.6% to RM119.45 million for 1HFY2024, from RM125.18 million for the previous corresponding period.
Cash and bank balances stood at RM64.9 million, versus RM86.25 million before.
Short-term borrowings stood at RM77.39 million, while longer-term loans amounted to RM204.2 million.
On Tuesday, Crescendo said that apart from the development of its balance land bank, the disposal proceeds will also be used for settlement of existing liabilities.
Shares in Crescendo, which have appreciated 17% year-to-date, were trading one sen or 0.74% lower at RM1.34 at Tuesday's noon market break, valuing the group at RM375.82 million.