OSK 2Q net profit up 32%, pays 2.5 sen dividend

KUALA LUMPUR (Aug 29): OSK Holdings Bhd's net profit rose 32% to RM55.75 million in the second quarter ended June 30, 2017 (2QFY17) from RM42.25 million a year ago, on higher profit generated from the financial services and investment holding segment.

This was partly offset by lower contribution from the property, construction and industries segments.

Earnings per share rose to 4.03 sen from 3.05 sen. Quarterly revenue, however, fell 11.2% to RM274.85 million in 2QFY17 from RM309.53 million in 2QFY16.

The group also declared an interim dividend of 2.5 sen per share for the financial year ending Dec 31, 2017 (FY17), payable on Oct 11.

For the cumulative six months (1HFY17), the group's net profit slipped 1.7% to RM110.01 million from RM111.87 million a year ago, while revenue fell 12.2% to RM577.39 million from RM657.81 million in 1HFY16.

In a filing with Bursa Malaysia today, OSK attributed the weaker 1HFY17 performance to lower contributions from the property and industries segments, offset by higher profit recorded from the financial services and investment holding segment, as well as reduced loss in the hospitality segment.

Going forward, OSK said it is confident that the group will achieve satisfactory results for the remaining year.

It said performance of the property development division will continue to be driven by sales and progress billings from the existing projects and new projects to be launched in Malaysia and Australia.

"In Malaysia, the group has targeted to launch the first phase of new development namely Iringan Bayu in Seremban and Ryan & Miho in Petaling Jaya Section 13. As at July 31, 2017, the group has unbilled sales of RM1 billion and the land bank stood at 2,055 acres," it added.

As at June 30, 2017, OSK's outstanding construction order book stood at RM534 million, which is expected to contribute steadily to the group's profitability.

On its industries segment, OSK said it is anticipated to perform satisfactorily as it continues to tap on projects undertaken by the government and private sectors, as well as enhancing its profitability through improving production efficiency, cost control, monitoring and reporting.

OSK shares closed unchanged at RM1.60 today, with 99,200 shares done, bringing a market capitalisation of RM2.22 billion. — theedgemarkets.com