KUALA LUMPUR (May 29): OSK Holdings Bhd posted a net profit of RM77.63 million for the first quarter ended March 31, 2020 (1QFY20), down 16% from RM92.87 million a year ago, due to the implementation of the movement control order (MCO).
In a bourse filing today, the group said its earnings per share also fell to 3.71 sen from 4.40 sen.
Meanwhile, the group’s revenue declined by 3.08% to RM255.73 million from RM263.87 million, as the imposition of the MCO has resulted in minimal or no revenue generated across all its segments from March 18 to March 31, 2020.
This has resulted in all its segments reporting weaker performance, except for its capital financing division, which recorded 34% higher pre-tax profit of RM13.88 million from the previous quarter, on top of 18% higher revenue of RM23.97 million.
“The group’s 1Q2020 results were also supported by a contribution of RM55.43 million from our stake in RHB Bank Bhd,” it added.
In a separate statement, OSK said the performance of its hotel division was severely affected by low occupancy rates since the Covid-19 outbreak, which has had a major impact on the tourism and hospitality markets across the region.
"Looking forward, the impact of the Covid-19 pandemic and the MCO will linger with businesses adapting to a new normal," it added.
Commenting on its prospect, the group said at this point, it is difficult to forecast the economic trajectory for the rest of FY20.
“The economic fallout from the Covid-19 pandemic is just beginning to appear and there are also other global uncertainties that make it extremely difficult to forecast how things will develop from here.
"Assuming that there are no further extensions to the MCO and that there are no new MCOs introduced in future, we expect to complete and hand over several of our projects in FY20.
"The division will focus on marketing the products that have been launched with competitive marketing strategies. The team is actively utilising digital strategies to reach out [to] customers and have some promising early results from these efforts," it said.
On the other hand, the group said the property division — which remains the group’s biggest contributor — aims to launch projects with a combined gross development value of RM166.5 million in FY20, namely Iringan Bayu Mekary Phase 3C comprising single-storey terrace homes in Seremban, Negeri Sembilan, and new phases of its Bandar Puteri Jaya project in Sungai Petani, Kedah.
Meanwhile, the Melbourne Square project in Australia has recorded a strong take-up rate of over 76% since its launch in 2017 and construction is progressing as scheduled.
“It is also important to note that the group’s balance sheet remains healthy, as our gearing continues to stand at a manageable level with sufficient cash on hand to meet our operational needs. The group’s treasury function has also set aside sufficient reserves to cater for debt servicing and principal repayment of our loans for the next two years,” it said.
At the time of writing, OSK's share price rose 0.6% or 0.5 sen to 84.5 sen with a market capitalisation of RM1.74 billion.
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