Crescendo records RM44 mil in 2Q net profit on fair value gains

Crescendo records RM44 mil in 2Q net profit on fair value gains
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KUALA LUMPUR (Sept 29): Crescendo Corp Bhd saw its net profit for the second quarter ended July 31, 2016 (2QFY17) jump almost 14 times to RM44.41 million from a year ago, thanks to a one-off fair value change of investment properties, amounting to RM41.4 million.

This would mean minus the fair value gain, net profit was actually almost unchanged at RM3.01 million, compared with RM3.087 million a year ago.

Revenue rose 20.4% to RM49.22 million, from RM40.89 million a year ago, due to higher properties sales.

The property developer declared an interim dividend of two sen per share, payable on Nov 21.  

For the cumulative six months ended July 31, 2016 (1HFY17), its net profit surged nearly four times to RM50.86 million, while revenue rose marginally by 0.9% to RM97.51 million, from RM96.63 million.  

Going forward, the group said it expects the current financial year to be a challenging one, with an uncertain global economic scenario, tightening credit control by banks and increase in cost of doing business.

"The group will be cautious in its launches, to avoid holding high levels of stock," it said.  

Despite the above uncertainties, it highlighted that there is still a demand for affordable housing, as well as landed medium cost residential, industrial and commercial property market, for strategically-located projects with the right pricing.

With a committed sales in hand and unbilled revenue of RM170 million as at Sept 23 for the property development operation, Crescendo said it expects performance of the group to remain satisfactory for FY17. 

Shares of Crescendo gained one sen or 0.68% to RM1.49 today, for a market capitalisation of RM338.92 million.