Mah Sing third-quarter net profit up 55%

Mah Sing group chief executive officer Datuk Ho Hon Sang called for the extension of the Home Ownership Campaign, which will be coming to an end by Dec 31.

PETALING JAYA: Mah Sing Group Bhd reported a 54.7% year-on-year (y-o-y) increase in net profit for the third quarter ended Sept 30, 2021 as lower cost of sales and income tax expense boosted its bottomline despite a weaker turnover.

In a filing with the stock exchange yesterday, the property developer said it had registered a net profit of RM40.17mil in the third quarter, as compared to RM25.96mil in the previous corresponding quarter.

Revenue in the July-to-September 2021 period dropped by 6.09% or over RM23mil to RM364.57mil, mainly due to the disruption faced by Mah Sing’s construction and manufacturing businesses amid the Covid-19 operating restrictions.

Earnings per share for the quarter under review was 1.65 sen. No dividend was declared for the quarter.

Cumulatively, for the first nine months of financial year 2021, Mah Sing’s net profit surged 79.06% y-o-y to RM120.85mil as compared to RM67.49mil in the previous corresponding period. The group’s revenue rose by almost 15% y-o-y to RM1.22bil from RM1.06bil a year earlier.

Mah Sing said it had achieved RM1.28bil new property sales for the nine-month period ended Sept 30, achieving 80% of its 2021 sales target. This represents a surge of 51.1% compared to the RM847.1mil new property sales in the same period last year.

For the nine-month period, Mah Sing’s property development segment recorded an operating profit of RM189.2mil on the back of a revenue of RM917.9mil, which were higher by 66% and 13%, respectively, y-o-y.

Despite the movement restrictions, the segment was boosted by higher property sales and revenue recognition of property projects under construction, coupled with the recognition of cost savings arising from the finalisation of certain construction contracts.

Meanwhile, Mah Sing’s manufacturing segment recorded a higher revenue of RM268.1mil and an operating loss of RM400,000.

“Revenue increased mainly contributed by higher sales of plastic pallets and automotive parts due to pent-up demand from essential and automotive industries.

“Operating loss of RM400,000 is mainly attributed to the glove plant’s pre-operating expenses and lower absorption of overhead costs as a result of low production volume in its first two quarters (second and third quarters) of operation due to government-mandated operating restrictions during the enhanced movement control order and the National Recovery Plan (period),” it said.

The group expects all of its 12 production lines to complete commissioning by early December 2021.

As for the hotel segment, it recorded an operating profit of RM600,000 in the nine-month period as compared to an operating loss of RM13.2mil a year ago. The previous year’s corresponding period results included impairment charges of approximately RM10mil.

Looking ahead, Mah Sing said the mid- to long-term demand for properties will continue to be supported by the young population, imbalance between demand and supply in selected locations for the right property types, and conducive interest rate environment.

“Mah Sing is well positioned to ride along with the market recovery, leveraging on its healthy liquidity profile, demand driven property portfolio and track record of execution,” it said.

“The group is optimistic that its property projects will continue to gain traction from buyers mainly due to their strategic locations with large captive market, affordable price points and well-designed features that meet current market demand,” it said.

Mah Sing group chief executive officer Datuk Ho Hon Sang called for the extension of the Home Ownership Campaign, which will be coming to an end by Dec 31.

“This will allow more first-time home buyers to enjoy the incentives in line with the recovery of the economy,” he said.

Meanwhile, in a separate announcement to the stock exchange, Mah Sing said it has acquired a 8.09-acre prime land in Kepong for RM95mil, with an approved development order.

The proposed development on the land, called M Nova, will comprise serviced residences and retail premises.

The project is estimated to have a gross development value of approximately RM790mil.

“In line with Mah Sing’s quick turnaround model and subject to authorities’ approval, M Nova is targeted for registration of interest in the first quarter of 2022 and estimated to be launched in the third quarter of 2022,” the group said.

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