OSK's 4Q net profit up 23%, declares 4 sen dividend

KUALA LUMPUR (Mar 1): OSK Holdings Bhd’s fourth quarter net profit rose 23.07% to RM98.32 million, from RM79.89 million in the immediate preceding quarter, on better contribution from all business segments except financial services and investment holding.

Earnings per share for the quarter ended Dec 31, 2021 (4QFY21) increased to 4.77 sen, from or 3.87 sen in 3QFY21, the group's bourse filing showed.

Revenue surged 43.22% to RM314.57 million, from RM219.63 million in 3QFY21, in tandem with the resumption of economic and social activities, and the lifting of domestic travel restrictions, the group said.

The property segment recorded a 40% increase in revenue to RM188.2 million, and pre-tax profit swelled by 2.5 times to RM54.7 million, compared with 3QFY21. These revenue and pre-tax profit were mainly derived from ongoing projects, as well as a higher share of profits from the group's joint venture projects, MSQ and Agile-Mont Kiara.

The construction segment registered a pre-tax profit of RM600,000, compared with a pre-tax loss of RM500,000 in 3QFY21, due to the higher progress billings from ongoing projects from the property development division.

The industries segment reported an increase in revenue to RM61.8 million and an increase in pre-tax profit to RM4.9 million, as both the cables and integrated building system (IBS) wall-panel divisions have recorded improved performance, mainly due to higher sales generated from the delivery of cables and IBS wall-panel to customers.

With the reopening of inter-district and interstate travels, the hospitality segment registered a substantial increase in revenue to RM16.4 million and narrowed pre-tax loss of RM0.3 million (excluding the impairment loss and write off on property, plant and equipment of RM3.8 million, that relating to the refurbishment of the hotels) in 4QFY21, compared with pre-tax loss of RM5.9 million in 3QFY21. The improvement of the performance of the hotels' division was due to higher occupancy rates with higher average room rates.

The capital financing division under the financial service segment recorded an increase in revenue by 6% to RM26.5 million, on the back of a higher average monthly loan portfolio. However, the division recorded a slight decrease in pre-tax profit by 1% to RM14.3 million, mainly due to an impairment loss provided of RM0.5 million in 4QFY21, in accordance with the applicable accounting standards.

The investment holding and other divisions reported pre-tax profit of RM58 million compared with RM59.1 million in 3QFY21, representing a slight decrease of RM1.1 million in pre-tax profit, mainly contributed by the share of profit of RHB group.

On a year-on-year basis, OSK's net profit was marginally down by 1.26% from RM99.57 million a year ago, while revenue dropped 6.25% from RM335.54 million.

For the full-year, the group's net profit grew 15.86% to RM398.23 million, from RM343.70 million a year ago. Revenue expanded 3.74% to RM1.13 billion, from RM1.09 billion.

OSK declared a final dividend of four sen payable on May 13, bringing the total dividend payout for FY21 to five sen.

OSK executive chairman Tan Sri Ong Leong Huat said early signs of national economic recovery as a result of the lifting of containment measures in 4QFY21, coupled with its business continuity strategies, had strengthened the group’s financial performance.

Looking forward, he said the group revenue is expected to remain strong in the coming quarters, supported by unbilled property sales of RM0.9 billion with nominal unsold completed stock as of Dec 31, 2021.

The group’s land bank totals 1,978 acres located across the Klang Valley, Sungai Petani, Butterworth, Kuantan, Seremban and Melbourne, Australia, with an estimated effective gross development value of RM14.7 billion.

OSK's share price closed up 0.5 sen or 0.56% at 89 sen on Monday (Feb 28), bringing the group a market capitalisation of RM1.87 billion.

Edited by S Kanagaraju

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