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Mah Sing 2Q net profit up 2%, achieves RM819.3 mil property sales in 1H

KUALA LUMPUR (Aug 28): Mah Sing Group Bhd's net profit rose 1.8% to RM90.39 million in the second quarter ended June 30, 2017 (2QFY17) from RM88.82 million a year ago.

Earnings per share grew to 3.75 sen in 2QFY17 from 3.69 sen in 2QFY16.

Quarterly revenue, however, fell 6% to RM727.14 million from RM773.9 million in 2QFY16.

For the cumulative six months (1HFY17), the group's net profit slipped 1.6% to RM180.81 million from RM183.85 million a year ago, on lower operating profit mainly due to higher selling, marketing and administrative expenses during the current financial period under review.

Revenue also fell 2.2% to RM1.45 billion in 1HFY17 from RM1.48 billion in 1HFY16.

The development projects which contributed to the group's results included Southville City @ KL South, Lakeville Residence in Taman Wahyu, D'sara Sentral in Sungai Buloh, M Residence and M Residence 2 @ Rawang, M City in Jalan Ampang, Icon City in Petaling Jaya, Garden Residence, Clover @ Garden Residence and Garden Plaza in Cyberjaya, Kinrara Residence in Puchong, Icon Residence in Mont'Kiara and Star Avenue @ D'sara.

Projects in Penang namely Southbay City, Legenda @ Southbay and Ferringhi Residence, and projects in Iskandar Malaysia such as The Meridin @ Medini, Meridin East, Sierra Perdana, Mah Sing i-Parc @ Port of Tanjung Pelepas and Austin Perdana as well as Sutera Avenue in Kota Kinabalu, Sabah, also contributed to the group's performance.

In a statement today, Mah Sing said the group achieved property sales of RM819.3 million in 1HFY17 and was looking to launch more properties below RM500,000 in 2HFY17 to meet current market demand.

It is targeting sales of at least RM1.8 billion for 2017.

"The group is looking to lock-in more lands and/or to explore joint venture opportunities with focus on mid-market affordable housing projects in the Klang Valley," said Mah Sing.

"Building on prudent financial management and disciplined project management, the group will strive to maintain a stable and reasonable return to shareholders by accelerating construction works of projects with good take-up rate and all the above should provide further impetus to the long-term sustainable growth of the group," it said.

Mah Sing group managing director Tan Sri Leong Hoy Kum said the group's net cash position as at June 30, 2017 provided opportunities to pursue more land banking activities.

"We are on the lookout for more strategic land banks, especially in the Klang Valley. In 2017 alone, the group acquired four news lands — three in the Klang Valley and one in Bukit Mertajam, Penang, which have a combined gross development value (GDV) of RM4.3 billion," he said.

"Our target is to increase our land banks in the Klang Valley to 75% from our current 67% in the next two years," he added.

Mah Sing currently has a remaining of 2,163 acres of undeveloped land with remaining GDV and unbilled sales of RM29.5 billion which can support the group's revenue and earnings growth for the next eight years.

Mah Sing shares rose one sen or 0.64% to close at RM1.58 at the midday market break, giving it a market capitalisation of RM3.84 billion. — theedgemarkets.com

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