Mah Sing ends FY19 on softer note, proposes 3.35 sen dividend

KUALA LUMPUR (Feb 28): Property developer Mah Sing Group Bhd posted a 31.9% decline in net profit for the fourth quarter ended Dec 31, 2019 (4QFY19) to RM44.99 million, from RM66.02 million a year ago, due to lower contribution from its property development segment.

This resulted in a lower earnings per share of 0.73 sen for 4QFY19 compared with 1.79 sen for 4QFY18.

Revenue for the quarter also declined 13.9% year-on-year to RM442.64 million from RM514.65 million.

Nevertheless, Mah Sing is proposing a first and final dividend of 3.35 sen per share for the financial year ended Dec 31, 2019 (FY19), which is subject to shareholders' approval at the upcoming annual general meeting.

The weak quarterly performance dragged the group's full-year net profit down 26.2% to RM200.33 million from RM271.58 million in FY18, while revenue contracted by 18.4% to RM1.79 billion from RM2.19 billion in the previous year.

In a bourse filing today, Mah Sing said revenue from property development came in lower at RM1.4 billion in FY19 compared with RM1.8 billion in FY18, while operating profit was RM254.6 million from RM327.7 million previously.

"This is mainly attributable to a higher proportion of new sales secured from new projects where contribution to revenue is expected to progressively increase upon completion of the initial stages of construction. Higher revenue and profit contribution are expected from these projects when construction momentum starts to increase," it added.

The group's cash and bank balances stood at RM1 billion as at Dec 31, 2019.

Going forward, the group has set a RM1.6 billion sales target for 2020 as it rides on 2019’s strong take-up of affordable homes.

Mah Sing said it achieved RM1.5 billion property sales last year, driven by its strategy in developing fit-for-purpose products that are affordably priced and located at strategic locations with good accessibility and connectivity.

"Planned new launches for 2020 include M Arisa in Sentul (Phase 2), M Luna at Kepong Metropolitan Park, M Adora at Taman Melawati, M Vertica, Cheras Tower D, Cerrado Suites Phase 2 and Sensory Residences Tower B at Southville City @ KL South, Carya and Phase 3 of M Aruna, Rawang, M Panora in Rawang, Ferringhi Residence 2 Block A & C in Penang and Acacia, Jasmine 1 & 3 linkhomes in Meridin East, Johor Baru," it added.

Mah Sing also said it is in a good position to continue to pursue more land banking activities while exploring any joint venture opportunities. As at Dec 31, 2019, the group has remaining landbank of 2,049 acres with remaining gross development value and unbilled sales totalling RM25.14 billion.

At 4.48pm, Mah Sing shares were down 0.5 sen or 0.77% at 64.5 sen today, with 2.02 million shares done, bringing a market capitalisation of RM1.57 billion.