Mah Sing’s Q1 net profit falls to RM30.07m

KUALA LUMPUR, May 29 — Mah Sing Group Bhd’s net profit in the first quarter ended March 31, 2020 (Q1 2020) fell to RM30.07 million from RM55.01 million in the same period last year.

Revenue declined to RM371.13 million from RM450.33 million previously.

In a filing with Bursa Malaysia today, Mah Sing attributed its performance to softer demand in its development project segment — the main contributor to the group’s results — during the Chinese New Year festive season, as well as delayed construction progress due to the movement control order (MCO).

“Weaker buyer sentiments and the closures of construction sites and sales offices due to the imposition of MCO to contain Covid-19 pandemic weighed on sales conversion and rate of works,” it said.

Revenue from its property development segment declined to RM281.3 million in Q1 2020 from RM355.5 million in Q1 2019, while operating profit fell to RM36.7 million from RM68.9 million previously, it said.

Mah Sing said its plastics segment continued to contribute positively to the group’s performance during the quarter, although revenue slipped to RM76.1 million compared to RM80.4 million in Q1 2019.

The segment’s operating profit grew slightly by 1.2 per cent to RM3.34 million for the quarter due to the drop in raw material prices.

Its hotel segment’s revenue declined slightly to RM1.9 million compared with RM2.2 million a year ago, it said, adding that the segment’s operating loss in Q1 2020 eased to RM3 million from RM3.7 million a year ago, mainly attributable to lower depreciation charges on hotel operating assets.

In a separate statement, founder and group managing director Tan Sri Leong Hoy Kum said the group posted a healthy balance sheet with cash and bank balances at approximately RM1.05 billion through disciplined financial management.

As at March 31, 2020, the group has a remaining landbank of 817.06 hectares, with remaining gross development value and unbilled sales totalling RM24.86 billion.

Leong said Mah Sing will maintain its selective balance sheet expansion by focusing on strategic land banks which are suitable for affordable products in greater Kuala Lumpur, Klang Valley and Johor.

“Market demand for affordable houses is expected to remain resilient as the majority of our young population are not yet house owners.

“We believe that properties are 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,” he said.

Moving forward, he said the group has set a RM1.6 billion sales target for 2020, with 84 per cent of its products priced below RM700,000.  — Bernama