MKH’s quarterly profit soars to RM50.7m by The EDGE

MKH’s quarterly profit soars to RM50.7m KUALA LUMPUR: Property cum plantation company MKH Bhd’s net profit jumped fourfold to RM50.7 million in its second quarter ended March 31 of financial year 2014 (2QFY14) from the RM12.7 million in the previous corresponding period. Revenue surged 37% to RM188.1 million from RM137.2 million, while earnings per share grew to 12.1 sen in 2QFY14 from 3.08 sen in 2QFY13. MKH’s stellar performance was attributed to a stronger contribution from both its property arm and oil palm plantation division, which are gaining steady growth momentum, according to executive chairman Tan Sri Alex Chen Kooi Chiew. For the six months ended March 31, MKH achieved a net profit of RM67.48 million, or 16.10 sen per share, up 44% from RM46.8 million, or 11.38 sen. Revenue came in higher at RM370.6 million against RM285 million previously. The group’s property division recorded a higher revenue of RM244.4 million for the six months ended March 31, with new sales totalling RM317 million, boosted by a favourable response to several of its launches. These projects include terraced link houses in Kajang East township and Hillpark@Shah Alam North, as well as its commercial project, MKH Avenue 1. In total, MKH’s unbilled sales stood at RM602 million in the period, underpinning its performance going forward. “We continue to enjoy a long-term profit track record for over 30 years now as our projects continue to be well received by home buyers whereby we are enjoying rapid sales in our new launches this year,” Chen said. With that, the group is on track to achieve RM800 million in new sales in 2014 alone, followed by future launches (over 50% will take place in the second half of this year) amounting to a gross development value (GDV) of RM1.4 billion. Its plantation arm, which achieved revenue growth of 75.2% to RM74.8 million in the first half of FY14, continues to grow steadily, driven by higher crude palm oil prices and increasing fresh fruit bunch production from its young oil palms. “We expect exponential [financial] growth by 2017 when all the trees reach their peak from seven to 15 years old,” Chen said, adding that the group remains bullish on its oil palm plantation division, which currently accounts for over 20% of its revenue and profit. On the other hand, the contribution from MKH’s 16,000ha of oil palm plantation in East Kalimantan (Indonesia) is said to be growing significantly, driven by the relativel y young age of the trees ranging from three to six years. Moving forward, Chen said both of MKH’s core divisions are expected to maintain growth as the group’s prime landbank within Kajang and Kuala Lumpur, with a GDV of RM6.2 billion, enables it to “innovate” more diversified developments. “We are actively looking out for land within and outside Malaysia to expand our property and plantation businesses,” he said. This article first appeared in The Edge Financial Daily, on May 28, 2014.