Mah Sing profit jumps 39%

KUALA LUMPUR: Having chalked up 42% growth in net profit for the first half of the year ended June 30 (1H), Mah Sing Group Bhd said it is well-positioned to deliver sustainable returns to shareholders given its strong property sales.

The property developer announced that its net profit jumped 39% to RM60 million, or 7.21 sen per share, for the second quarter (2Q) ended June 30, against RM43.1 million, or 5.19 sen per share in the previous corresponding period.

Revenue came in higher at RM455.2 million against RM416 million the year before.

The improved 2Q earnings lifted Mah Sing’s 1H net profit to RM120 million, 14.41 sen per share, compared with RM84.3 million, 10.14 sen per share, in the previous corresponding period.  Revenue expanded 25.4% to RM912.9 million from RM727.8 million previously.

Mah Sing said in a statement revenue from its core property segment jumped 29% to RM808 million during 1H, helped by sales from several flagship projects in the Klang Valley, Penang and Johor Baru.

The niche property developer still had 605ha of undeveloped land as at June 30, which it says is worth some RM18 billion in gross development value (GDV). Unbilled sales stood at RM2.69 billion.

Mah Sing expects to deliver vacant possession of 1,290 property units in 2H, having already delivered 780 in 1H.

“Billings from vacant possession alone are expected to generate cash inflows estimated at RM315 million, in addition to inflows from ongoing [projects],” it said in notes accompanying its earnings yesterday.

“The solid operating performance was achieved with balance sheet strength maintained,” it said, adding that its cash pile stood at RM555 million as at June 30, with net gearing at 0.3 times.

Solid performance in its property division helped negate margins pressure seen at its plastics division, which was hit by foreign exchange difference and higher staff costs from Indonesia’s minimum wage ruling.

Revenue generated from the plastics segment was up 1% to RM100.8 million for the six-month period ended June 30 and remained profitable.

Planned property launches and previews ahead include new phases at M Residence @ Rawang, the Ferringhi Residence in Penang, it added.

Mah Sing closed at RM2.38 yesterday, being 1.75 times its net assets of RM1.36 per share.


This article appeared in The Edge Financial Daily on 17 August, 2012.