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Saturday, November 29, 2014

MKH land bank increases to GDV of RM10b

Source: http://www.thestar.com.my/Business/Business-News/2014/11/28/MKH-land-bank-increases-to-GDV-of-RM10b/?style=biz

KUALA LUMPUR: MKH Bhd’s latest joint ventures for high rise developments in Mont Kiara, Puchong and Kajang town has seen its land bank increase to a gross development value (GDV) of RM10bil.
MKH executive chairman Tan Sri Alex Chen said on Friday the GDV of RM10bil would “keep us busy for the next 10 years”. 
He said the group’s foothold in property and plantation would be the twin boosters to support the group’s future earnings and growth momentum. 
Chen said MKH had set its sales target at RM850mil for FY15 from its planned launches for different market segments with greater focus on affordable housing in Kajang, Semenyih, Cheras and Puchong.
MKH recorded earnings of RM102.33mil in FY14 ended Sept 30, 2014 compared with RM103.97mil in FY13. Pre-tax profit rose 20.2% to RM161.43mil from RM134.25mil a year ago. Group revenue rose 17.2% to RM806.55mil from RM688.22mil.

The company said then stronger financial performance was underpinned by strong sales performance of the group’s property developments and sale of crude palm oil (CPO) and kernel. 
The better financial performance was mainly supported by robust profit from its oil palm plantation segment and higher gain in fair value derived from investment properties.
This was after excluding unrealised foreign exchange (forex) losses of RM17.8mil due to translation difference on US dollar and ringgit borrowings against the rupiah for its plantation business in Indonesia,” it said.
MKH said there was the absence of bargain purchase gain on acquisition of subsidiaries of RM31.2mil, higher interest expense of RM15.5mil and lower share of profit of an associate following the completion of Areca Residence this year compared to a year ago.
The group’s property & construction segment recorded an increase of 11.3% in revenue to RM530.0mil from RM476.1mil a year ago following good response to its new property launches across the year including Hillpark @ Shah Alam North, MKH Avenue I, Saville @ Kajang and Pelangi Heights. 

“Flexibility in its product mix ranging from commercial properties to premium homes with greater focus on affordable housing has proven to be a successful strategy adopted by the group. 

“This is evident from its record-breaking new property sales of RM820mil, a marked improvement of 41% from RM580.8mil recorded at end of FY13. 

“Consequently, MKH’s unbilled sales reached a new record high of RM823.0mil, 64% up from RM503.2mil recorded a year ago,” it said.

Despite the increase in revenue, the property and construction division recorded lower profit before tax of RM85.2mil compared to RM143.8mil a year ago.
 
MKH said this was mainly due to the absence of bargain purchase gain on acquisition of subsidiaries of RM31.2mil, higher interest expense of RM15.5mil and lower share of profit of an associate following the completion of Areca Residence this year compared to a year ago.

Slower profit recognition for new launches in the preliminary development stage, namely Hillpark Shah Alam, Pelangi Heights, Kajang East and MKH Avenue also contributed to the lower profit before tax. 

“However, the rising and unprecedented high unbilled sales of RM823.0mil will underpin long-term earnings visibility for the Group from which attributed sales revenue and profits will be recognised progressively as the developments of completion progresses,” it said. 

Commenting on the oil palm division, MKH said this was another key growth driver to the group. While, CPO prices had fallen sharply recently, the segment contributed substantially to the group with its new high-record profit before tax (PBT) of RM22.2mil, up 149% from the RM44.9mil loss before tax in FY13. 

“PBT excluding the unrealised forex losses surged 751% to RM40.0mil from RM4.7mil a year ago. The turnaround from loss before tax to profit for FY14 was attributed to higher revenue and gross profit coupled with lower unrealised forex losses of RM17.8mil compared to RM49.6mil in the preceding year,” it said.

MKH said revenue from the sale of CPO and palm kernel increased by 63% to RM164.8mil from RM101.1mil a year ago, buoyed by increasing fresh fruit bunches (FFB) yield of 295,000 tonnes which surpassed its yearly target of 270,000 tonnes. 

Fresh fruit bunches (FFB) yield improved by 31.3% to 21 tonnes a ha from mature and immature trees, while oil extraction rate efficiency (OER) improved to 21.5 % for FY 14.

MKH recently upgraded its CPO mill to 90 tonnes an hour to cater to its fast growing FFB yield of 360,000 tones with increased oil extraction rate to 23% for FY15.

In the fourth quarter ended Sept 30, 2014, its earnings slipped to RM23.24mil from RM24.78mil a year ago. Revenue rose 2.6% to RM223.61mil from RM217.78. Earnings per share were 5.54 sen compared with 6.01 sen.

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