OSK kicks off FY2023 on strong note

• The group’s property division will continue to be supported by the recognition of revenue from progress billings of properties sold from the ongoing projects in Malaysia and Australia.

KUALA LUMPUR (May 26): OSK Holdings Bhd registered a net profit of RM115.09 million, or earnings per share of 5.58 sen, in the first quarter ended March 31, 2023 (1QFY2023), a 36.3% increase from RM84.44 million or 4.09 sen per share a year before.

The better quarterly earnings were due to its operating performance across all business segments showing improvement, underpinned by stronger consumer sentiment, recovering labour market conditions and the revival of tourism activities, said the conglomerate in a filing with Bursa Malaysia on Friday (May 26).

The conglomerate has business interests in five different segments, namely property, financial services and investment holding, construction, industries, and hospitality.

Quarterly revenue rose 8.73% year-on-year to RM333.20 million in 1QFY2023 from RM306.46 million.

On the group’s current year prospects, OSK group chairman Tan Sri Ong Leong Huat said despite global uncertainties, the group is well positioned to grow in the coming year as it actively expands its market share, innovates and improves product proposition, while managing cost base and optimising margins.

“This has proven to be the right formula as seen in the continuous improvement of our financial performance throughout the post-pandemic era, enabled by our prudent financial approach and management. With these resiliencies in place, we are confident that FY2023 will be another satisfactory year for the group,” he added.

The group’s property division will continue to be supported by the recognition of revenue from progress billings of properties sold from the ongoing projects in Malaysia and Australia.

OSK had unbilled sales of RM1 billion as at March 31, 2023 with minimal unsold completed stocks. Strategically located in Klang Valley, Sungai Petani, Butterworth, Kuantan and Seremban in Malaysia and Melbourne, Australia, it has a total land bank of 2,002 acres with an estimated effective gross development value (GDV) of RM16.2 billion.

OSK expects the property development division will remain one of the key contributors to the group’s performance for FY2023.

Meanwhile, its construction business will focus on delivering its current outstanding order book, which stood at RM415.1 million as at March 31, 2023. This division will continue to support the property development division in building quality homes within cost and time.

As for its industrial segment — comprising cables and precast industralised building system (IBS) wall panels manufacturing business, it is actively exploring domestic and export market opportunities, especially in Singapore, as building and construction activities return to full swing and travel restrictions are lifted.

The performance of its hospitality segment is also expected to be stable in FY2023 with the existing partnership with the operating partners for two rebranded hotels, namely DoubleTree by Hilton Damai Laut Resort, and Holiday Inn Express & Suites Johor Bahru.

For the financial services and investment holding segment, demand for financing is expected to remain strong as investment and business activities continue to gain strength, evidenced by higher loan disbursement in 1QFY2023 compared with the corresponding quarter in FY2022.

At 3.45pm, shares of OSK rose 0.5 sen or 0.52% to 97 sen, giving the group a market capitalisation of RM2.03 billion.