KUALA LUMPUR (May 29): Mah Sing Group Bhd has registered a 45.34% drop in first quarter net profit due to the traditionally softer demand during the Chinese New Year period and delayed construction progress because of the movement control order (MCO).
However, the property developer stressed that its balance sheet remains healthy with cash and bank balances of RM1.05 billion as at March 31, adding that the group will continue to look out for prime land for development in the Klang Valley area.
In a bourse filing today, the group said its net profit for the first quarter ended March 31, 2020 dropped to RM30.07 million, from RM55.01 million a year earlier. Earnings per share came down to 0.48 sen from 1.51 sen.
Quarterly revenue dropped 17.58% to RM371.13 million, from RM450.33 million in the year-ago first quarter.
Mah Sing said revenue from the group’s property segment declined to RM281.3 million, from RM355.5 million previously, with operating profit dropping to RM36.7 million from RM68.9 million.
The group said weaker buyer sentiment and the closure of construction sites and sales offices due to the MCO weighed on sales conversion and construction progress.
It added that in view of the challenging market environment, Mah Sing is strengthening its digitalization initiatives by accelerating capabilities to market products digitally.
The group managed to have a smooth migration of its full workforce to remote working, with 100% of client-consultation-meetings held online.
“We have increased our digitalisation efforts to reach out to buyers during MCO, as this is the way moving forward for the entire industry,” said Mah Sing founder and managing director Tan Sri Leong Hoy Kum in a statement.
“Currently, the group’s eligible construction sites which have met the requirements and standard operating procedure set during the conditional MCO period have gradually resume operations,” he said.
He added that market demand for affordable houses is expected to remain resilient as the majority of the country’s young population are not yet house owners.
“We believe properties to be the preferred investment asset class to build and preserve wealth. Armed with strategically located landbanks, we will continue to focus on well-designed products with attractive price points in line with the market demand,” Leong said.
Mah Sing has set a RM1.6 billion sales target for 2020 with 84% of products priced below RM700,000.
“While the market is challenging, the group is cautiously optimistic that demand for their property projects will obtain buyers’ interest, driven by strategic location, attractive price points coupled with attractive packages, innovative design and layout,” the group said.
As at March 31, the group has remaining landbank of 2,019 acres with remaining gross development value and unbilled sales totalling RM24.86billion, it added.
Mah Sing’s share price rose 5.68% to close at 46.5 sen, valuing the property developer at RM1.13 billion.
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