KSL 3Q net profit up 2.5%; declares 5 sen dividend

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KUALA LUMPUR (Nov 28): Johor-based property developer KSL Holdings Bhd's net profit rose 2.5% to RM70.13 million for the third financial quarter ended Sept 30, 2014 (3QFY14) from RM68.4 million a year ago, on lower selling and marketing expenses, cost of sales and finance costs, but offset by increased administrative expenses.

Revenue for 3QFY14, however, fell 4.8% to RM206.44 million from RM216.8 million a year ago, mainly due to the change in sales mixed and percentage of completion of the existing main on-going projects of the group, especially in Johor Baru.

Nevertheless, the group declared an interim dividend of 5 sen per share, which marks its first dividend payout in three years. The total distribution of RM19.64 million constituted 28% of KSL’s net income for the quarter.

In a filing with Bursa Malaysia today, the group noted that its profit margins for 3QFY14 stood at 34% compared with 31.5% in 3QFY13.

For the nine months period (9MFY14), KSL's net profit jumped 15.3% to RM210.36 million from RM182.4 million a year ago, higher than its full year net profit over the past five financial years.

Revenue also rose 12.1% to RM634.45 million from RM565.92 million in 9MFY13.

On prospects, KSL said it plans to continue developing residential and commercial properties in Johor Baru, Segamat, Kluang and Muar. 

"The group has some 2,100 acres of land held for current and future development which are strategically located in the District of Johor Baru, Batu Pahat, Kluang, Segamat, Muar, Mersing, Klang and Kuala Lumpur.

"Most of these properties are available for immediate development as they have been granted approval for subdivision. These will help the group to sustain its medium to long term development and profitability," it said.

KSL said it is in the midst of developing the land in Klang, which has a gross development value (GDV) of RM10 billion with five development phases.

"This mixed development project is expected to entail thousands of units of residential and commercial properties and provides impetus for the Group’s future earnings growth," it added.

Besides property development activities, KSL also announced that it is planning to further diversify its business portfolio to generate more recurring income. “The group continues to pursue selective investments in order to generate stable, predictable returns for shareholders. Presently, it has investment properties that are contributing millions of annual rental income.”

For 9MFY14, KSL saw its mall operation reporting a rental income of RM54.27 million, while its hotel and food and beverage segment contributed RM50.74 million.

In all, the group’s recurring income sources contributed about 16% of total revenue so far this year.