Crescendo's 2Q profit down 37% on lower profit margin

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KUALA LUMPUR (Sept 27): Property developer Crescendo Corp Bhd's second quarter net profit fell 36.7% to RM10.99 million, from RM17.37 million a year ago, due to higher sales of affordable housing, which has a lower profit margin.

Earnings per share for the quarter ended July 31, 2018 fell to 3.93 sen from 6.22 sen previously, the group said in a filing with Bursa Malaysia.

Quarterly revenue rose 9.17% to RM94.91 million versus RM86.94 million a year ago, following higher sales of mid-market landed residential properties.

The group has declared an interim dividend of three sen per share, payable on Nov 22. The ex-date is Oct 29.

Crescendo said total net profit for the first two quarters dropped 32.7% to RM14.23 million or 5.09 sen per share, from RM21.14 million or 7.57 sen per share in the previous corresponding period. Revenue grew 10.8% to RM149.37 million from RM134.79 million.

During the six months, the group had launched 17 units of terrace factories in Taman Perindustrian Cemerlang in Johor, 24 units of shop offices, as well as 102 units of mid-market landed residential properties and 204 units of affordable housing at nearby Bandar Cemerlang.

Going forward, the group is planning to launch 23 units of detached, semi-detached and cluster factories at Taman Perindustrian Cemerlang as well as 222 units of affordable housing at Tanjung Senibong.

Crescendo said although the property development segment is expected to be challenging in the current financial year, demand for landed properties in strategic growth areas with good accessibility and connectivity could remain resilient.

"The group will continue to leverage on its strategic land bank to develop properties that meet current market needs.

"With the unbilled sales of RM213.5 million as at Sept 21 for the property development operation, the board expects the performance of the group to remain satisfactory for the financial year ending Jan 31, 2019," it said.

Crescendo shares closed unchanged at RM1.33, for a market capitalisation of RM371.63 million.