Matrix Concepts 2QFY22 net profit drops to RM51.8m due to lower margins; declares three sen dividend

KUALA LUMPUR (Nov 25): Matrix Concepts Holdings Bhd saw its net profit for the second quarter ended Sept 30, 2021 (2QFY22) dropped 31% year-on-year to RM51.8 million from RM75.06 million, due to lower margins from its latest development series of Laman Sendayan 1 & 2, which are currently at the early phases.

This lowered its earnings per share to 6.21 sen from nine sen previously, according to the Seremban-based property developer’s filing with the local bourse on Thursday (Nov 25). 

Matrix Concepts’ revenue for the quarter under review declined by 8.6% to RM239.45 million from RM262.01 million a year earlier. The group noted its revenue remained healthy despite the impact of the Movement Control Order 3.0 (MCO 3.0) and Full Movement Control Order (FMCO) for about six weeks, as the group expedited its construction activities after restrictions on the sector were lifted in August 2021.

It declared a dividend of three sen per share for the financial year ending March 31, 2022 (FY22), to be paid on Jan 6. 

For the cumulative six months, Matrix Concepts said net profit fell to RM83.49 million from RM106.12 million a year ago, on the back of revenue of RM402.91 million versus RM424.04 million previously. 

Reviewing its performance, Matrix Concepts said its flagship Sendayan Developments remained the main revenue contributor at RM211.3 million, growing 9.8% from RM192.4 million reported last year. 

“Meanwhile, contribution from the group’s Klang Valley development project decreased by 17.8% to RM10.6 million from RM12.9 million previously, while the group’s Bandar Seri Impian developments in Johor saw a 72.1% decline to RM10.1 million from RM36.2 million last year, impacted by the MCO from June to August 2021.

“The group continued to benefit from the unabated market demand for well-priced, quality landed homes, with 81.8% or RM195.9 million of its revenue for the quarter derived from the residential property segment. In addition, revenue generated from the sales of industrial properties increased to RM30.6 million from RM26.7 million last year,” it noted. 

“Group profit after tax decreased to RM50.4 million, down 31.4% from RM73.5 million previously, while net margin reduced to 21.0% as compared to 28.0% in the previous year’s corresponding quarter,” it said. 

Compared to the immediate preceding quarter, Matrix Concepts’ 2QFY22 net profit soared 63.44% from RM31.69 million in 1QFY22 as revenue grew 46.52% from RM163.44 million. This was attributed to the group’s expedited construction activities and new property launches, as operating conditions improved while various states entered Phases 3 and 4 of the National Recovery Plan in August 2021.

While the MCO 3.0 and FMCO affected the group’s businesses including the property sector, Matrix Concepts managed to secure RM350.3 million of new property sales for the quarter under review, driven by healthy demand for its new launches at Sendayan Developments. 

In addition, its unbilled sales of RM1.1 billion as at Sept 30, 2021 provides earnings visibility over the next 12 to 15 months, the group noted. 

On its prospects, the developer said its objective remains dedicated to enhancing its township developments of Sendayan Developments, comprising Bandar Sri Sendayan, Ara Sendayan and Tiara Sendayan in Negeri Sembilan, and Bandar Seri Impian (BSI) in Kluang, Johor. 

It said this includes improvement to amenities and infrastructure to support vibrant community living, as well as land banking efforts to expand future launch pipelines.

“To enhance long-term sustainability in the property development segment, the group has embarked on diversification of its revenue stream beyond Negeri Sembilan and Johor by expanding its domestic project portfolio to Klang Valley, and internationally, in Melbourne, Australia and Jakarta, Indonesia,” Matrix Concepts said. 

The group added it remains cautiously optimistic of maintaining healthy performance for FY22, backed by encouraging demand for ongoing developments, the extension of Home Ownership Campaign until Dec 31, 2021 by the Housing and Local Government Ministry, and low interest rate environment. 

At the 12.30pm break, Matrix Concepts was unchanged at RM2.20, with some 43,000 shares changing hands. 

At RM2.20, it had a market capitalisation of RM1.84 billion. The stock has risen 22.22% year-to-date. 

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