AG Report: PR1MA registered RM257mil net loss in 2022

KUALA LUMPUR: PR1MA Corporation Malaysia, the main housing agency of the Housing and Local Government Ministry's, logged a net loss amounting to RM257 million in 2022.

According to the Auditor-General's Analysis of Financial Statements of Federal Agencies for the Year 2022, this was due to a drop of 33.7 per cent, or RM0.435 billion, in the sales of commercial properties and housing units by 33.7 per cent, or RM0.435 billion.

The report said the sales of commercial properties and houses dropped to RM0.857 billion in 2022 from RM1.292 billion the previous year.

"As of Dec 31, 2022, PR1MA recorded liabilities amounting to RM5.746 billion," the report said.

The report also raised its concern about PR1MA's capability to repay its Islamic Medium-Term Note Loan Repayment (Sukuk Tranche 2) based on agency's cash and cash equivalent balance as of Dec 31, 2022.

"The sukuk loan balances amounted to RM3.792 billion (2021:RM4.542 billion).

"PR1MA needs to pay the debts by 2027, including Sukuk Tranche 2 amounting to RM1.750 billion which will mature in October this year.

"Based on cash and cash equivalent amounting to RM0.428 billion as of Dec 31, 2022, PR1MA encounters difficulties to repay Sukuk Tranche 2," the report said.

The AG, therefore, asked PR1MA to re-evaluate its development strategy for residential and commercial projects based on current needs and market conditions.

This, the report said, was to ensure the marketability of PR1MA's completed residential and commercial units and subsequently enable the agency to achieve its project development objectives.

The report asked PR1MA to ensure its cash projections from sales of residential and commercial units could be achieved.

"This is to fund operational activities and to settle the Sukuk Tranche 2 amounting to RM1.750 billion, maturing in October this year."

PR1MA, in its response received by the AG on Jan 22 this year, said the agency had eight core strategic development plan to address the issues highlighted in the report.

The plan, the agency said included entering into strategic partnerships for the development of housing projects, as well as developing housing projects on existing lands that have been identified as having high returns.

"Since our transformation and turnaround exercise started in 2019, PR1MA has switched its strategy and approach from 'develop and sell' module to 'sell and develop' module.

"And through renegotiations with developers, PR1MA has signed a supplementary agreement in which a condition was inserted requiring developers to be responsible for the sales of houses as well."

To address the issues surrounding the drop in sales, PR1MA said it had conducted programmes and sales campaign to ensure all housing units could be sold.

It added that the agency sold 42,851 housing units as of December last year.

"As per the plan and instructions of the (Housing and Local Government) ministry, PR1MA needs to restructure its strategy related to the utilisation of funds by focusing on the existing commitments and postponing the repayment of a portion of the Sukuk Tranche 2.

"PR1MA has applied for the postponement of the repayment of the principal of the sukuk with the government guarantee amounting to RM1 billion.

"The application received approval from the Finance Ministry on Jan 2 this year," it said.

PR1MA, launched by former prime minister Datuk Seri Najib Razak in 2011, aimed at assisting middle-income earners to own a property.

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