MKH's 2Q profits surge fivefold, expects better FY2016

KUALA LUMPUR (May 27): MKH Bhd's net profit for the second quarter ended March 31, 2016 (2QFY16) rose over fivefold to RM55.38 million or 13.2 sen per share, from RM10.9 million or 2.6 sen per share in the same period a year ago, mainly on better contributions from two divisions: property and construction, and plantation.

Quarterly revenue came in 40.3% higher at RM322.23 million, from RM229.72 million a year ago. No dividend was declared for the current quarter under review, its bourse filing today showed.

For the six months ended March 31 (1HFY16), its net profit gained 185% to RM116.95 million or 27.88 sen per share, from RM41.03 million or 9.78 sen per share last year; revenue was almost 35% higher at RM588.59 million, from RM437.35 million in 1HFY15.

Notably, it saw improved revenue and profit recognition in the year-to-date (YTD) period from the property and construction division from on-going development projects, namely Hill Park Shah Alam, Pelangi Heights, Kajang East, MKH Avenue, MKH Boulevard, Saville @ Kajang, Pelangi Semenyih, Saville @ Cheras and HillPark 3.

There was also a project grant from government that amounted to RM11.7 million. As at March 31, its locked-in unbilled sales was at RM827.7 million.

Meanwhile, its plantation division saw a 3.7% year-on-year increase in revenue, but recorded a pre-tax profit of RM36.8 million — as opposed to a loss before tax of RM2.1 million a year ago — mainly due to the inclusion of unrealised foreign exchange gain of RM27 million in the current YTD.

The forex gain was due to the strengthening of the Indonesian rupiah against its US dollar borrowings.  

Going forward, MKH expects to achieve better results for the financial year ending Sept 30, 2016, from the continued recognition of profit from the locked-in sales of its ongoing projects, and profit contribution from the plantation as more palms are entering into maturity stage, coupled with anticipation of an increase in crude palm oil and palm kernel prices.

It also targets a fresh fruit brunch production of 415,000 metric tonnes for the current financial year.

Shares in MKH closed up one sen or 0.42% at RM2.40, after 79,200 shares exchanged hands. The current price gives it a market value of RM1.01 billion. -- theedgemarkets.com

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