KUALA LUMPUR: Mah Sing Group Bhd's net profit in the first quarter ended March 31, 2020 fell to RM30.07 mil from RM55.01 mil in the same period last year.
Revenue declined to RM371.13 mil from RM450.33 mil 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 the Covid-19 pandemic weighed on sales conversion and rate of work,” it said.
Revenue from its property development segment declined to RM281.3 mil in 1Q20 from RM355.5 mil in 1Q19, while operating profit fell to RM36.7 mil from RM68.9 mil 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 mil compared to RM80.4 mil in 1Q19.
The segment’s operating profit grew slightly by 1.2% to RM3.34 mil due to the drop in raw material prices.
Its hotel segment’s revenue declined slightly to RM1.9 mil from RM2.2 mil a year ago, it said, adding that the segment’s operating loss in 1Q20 eased to RM3 mil from RM3.7 mil 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 about RM1.05 bil through disciplined financial management.
As at March 31, 2020, the group has a remaining landbank of 817.06ha, with remaining gross development value and unbilled sales totalling RM24.86 bil.
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 stressed.
Moving forward, Leong said the group has set a RM1.6 bil sales target for 2020, with 84% of its products priced below RM700,000. - May 29, 2020, Bernama