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Friday, August 26, 2016

Mah Sing posts RM88.8mil Q2 net profit

Friday, 26 August 2016
Mah Sing posts RM88.8mil Q2 net profit

PETALING JAYA: Amidst a soft property market, Mah Sing Group Bhd saw net profit fall marginally to RM88.8mil in the second quarter ended June 30, 2016 compared with the same quarter a year ago on lower revenue and higher income tax expenses.

The developer’s revenue was almost unchanged at 0.84% to RM773.9mil during the period in review. The company’s earnings per share (EPS) was down to 3.69 sen from 3.77 sen previously.

For the cumulative six months, Mah Sing’s net profit of RM183.85mil was 2.9% lower than the RM189.38mil registered in the first half of 2015. Consequently, its EPS fell to 6.87 sen from 8.34 sen.

The group’s revenue fell 5.2% to RM1.48bil in the first half of 2016 from RM1.56bil in the previous corresponding period.

In a statement, Mah Sing pointed out that its revenue from property development stood at about RM1.3bil and operating profit at RM252.3mil for the six months ended June 30, 2016.

It said the operating profit was higher mainly due to lower selling, marketing and administrative expenses during the current financial period.

The decrease in revenue, on the other hand, was due to M City in Jalan Ampang and Icon City in Petaling Jaya in active construction stage last year, and approaching completion in current period.

Going forward, the company expects revenue and profit contribution from Southville City @ KL South, Lakeville Residence in Taman Wahyu, and D’sara Sentral in Sungai Buloh to pick up momentum as construction work progresses.

“As planned, we have intensified launches in the second half of 2016. The timing is right as sentiments have improved.

“Our focus has been built around ‘Luxury you can afford’ and we have had very positive results,” Mah Sing group managing director Tan Sri Leong Hoy Kum said, pointing to a slew of launches with the company’s biggest township of Meridin East in Johor and the resort project of Ferringhi Residence 2 in August.

According to Leong, both projects had seen encouraging take-up rates, with the Greenway link homes in Meridin East Johor registering an 85% take up from the 492 units launched, while Ferringhi Residence 2 saw an 84% take-up from the 120 units launched.

Mah Sing said the company achieved cumulative property sales of approximately RM1.03bil for the seven-months ended July 31, 2016 due to products that were in line with the current market demand.

Leong said the overall buyers sentiment had lifted due to the interest rate cut from 3.25% to 3% by Bank Negara and demand was still strong for mass market range of properties in well-connected areas.

“We have the right product mix that is catered to the current market’s needs, hence we believe that we will continue to do well.

“Currently, obtaining mortgage financing remains the biggest hurdle for many buyers,” Leong noted.

“Property has proven to be the best hedge against inflation and we hope the banking fraternity will continue to support asset accretion by Malaysians,” he added.

At present, Mah Sing has remaining landbank of 2,492 acres with gross development value (GDV) worth approximately RM27.5bil. Including the unbilled sales of approximately RM4.2bil, the total RM31.7bil can support eight to nine years of revenue growth.

To encourage ownerships of affordable homes, Mah Sing has teamed up with Bank Simpanan Nasional (BSN) under the Youth Housing Scheme for Cerrado Residential Suites and Greenway@Meridin East.

Supporting the market’s need, the company will continue to focus within the Klang Valley, as 89% of Mah Sing’s planned residential launches priced below RM1mil, 68% priced below RM700,000 and 50% priced below RM500,000.

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