KUALA LUMPUR (July 27): Melati Ehsan Holdings Bhd saw its net profit fall 87.6% to RM827,000 or 0.69 sen per share for the third financial quarter ended May 31, 2015 (3QFY15) from RM6.64 million or 5.55 sen per share a year ago, mainly due to lower operating profit from all segments of the group.
 
Revenue for 3QFY15 declined 57.2% to RM46.26 million from RM108.16 million in 3QFY14.
 
For the nine months period (9MFY15), Melati Ehsan's (fundamental: 1.8; valuation: 2) net profit plunged 67.43% to RM5.51 million from RM16.92 million a year ago.
 
Revenue for 9MFY15 dropped 38.92% to RM154.33 million from RM252.67 million in 9MFY14.
 
Melati Ehsan said the construction segment recorded a lower revenue of RM121.89 million in 9MFY15 compared with RM151.52 million a year ago, due to construction works at Medini Iskandar, Johor and one of the “Program Perumahan Rakyat” (PPR) project having reached final stage of completion.
 
For the property development segment, the group recorded revenue of RM27.86 million and pre-tax profit of RM3.02 million in 9MFY15 compared with RM70.66 million and RM5.32 million respectively, in 9MFY14.
 
The lower profit recorded was due mainly to lower revenue as two of its residential projects namely, Laman Bayu @ Bukit Jalil, Kuala Lumpur and Taman Ehsan Jaya, Phase 1A(i) Project at Pandamaran, Klang have been completed, said Melati Ehsan.
 
Moving forward, Melati Ehsan said the on-going construction works and property development such as road work in East Coast Economic Region (ECER) projects, PPR and Taman Ehsan Jaya at Pandamaran will continue to contribute positively to the group’s revenue and profitability.
 
This is despite moderation economic outlook due to the falling crude oil prices and weaker ringgit.
 
“The board of directors is optimistic about the group’s ability to continue to achieve satisfactory performance for the financial year ending Aug 31, 2015,” Melati Ehsan said.
 
The stock closed 2 sen or 1.89% higher at RM1.08 today, giving it a market capitalisation of RM126.67 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)