OSK 3Q net profit surges 70% driven by property, financial services businesses

KUALA LUMPUR (Nov 26): OSK Holdings Bhd’s net profit jumped 69.4% to RM107.58 million in the third quarter ended Sept 30, 2019 (3QFY19), from RM63.52 million a year ago, mainly contributed by its property and financial services business segments.

This resulted in a higher earnings per share of 5.18 sen for 3QFY19 compared with 3.06 sen for 3QFY18.

This was despite a 10% drop in quarterly revenue to RM315.72 million, from RM351.24 million in 3QFY18, it said in a bourse filing yesterday.

OSK said its property segment enjoyed a 2.15 times jump in pre-tax profit due to the higher share of profit of associated companies and reversal of costs provided no longer required upon completion of certain projects; while the capital financing division improved due to the higher interest income generated from higher loan disbursement.

Meanwhile, its construction segment saw a decrease in profitability due to lower contribution from its ongoing projects namely Windmill, TimurBay and Iringan Bayu; while profit for its industries segment were weaker due to sales achieved on different product composition.

The group’s hospitality segment reported a loss during the current quarter as profit earned from the sale of membership in Vacation Club were not sufficient to cushion the losses from hotel operations. The hotel operations continued to suffer from low occupancy and room rates.

The improved quarterly earnings lifted the group's net profit for the cumulative nine months (9MFY19) by 45.4% to RM281.84 million,from RM193.84 million a year ago, while revenue rose 3.3% to RM915.99 million versus RM886.68 million in 9MFY18.

In a separate statement, OSK executive chairman Tan Sri Ong Leong Huat said the board of directors is confident that the group will deliver a strong set of results for the remainder of the year in spite of the challenging market environment.

The group will launch in 4QFY19 two new phases of double storey terrace homes at the Iringan Bayu township in Seremban, and 32 units of single-storey bungalow in at Bandar Puteri Jaya in Kedah, with a combined gross development value (GDV) of RM134.37 million.

As at Sept 30, 2019, OSK has unbilled sales of RM1.69 billion with minimal unsold completed stocks, while land bank stood at 1,722 acres with an estimated effective GDV of RM10.6 billion in the Klang Valley, Sungai Petani, Butterworth, Kuantan, Seremban and Melbourne, Australia.

OSK shares closed one sen or 1.07% lower at 94.5 sen apiece yesterday, valuing the group at RM1.96 billion.

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