KUALA LUMPUR (May 28): MKH Bhd’s net profit plummeted 78% on-year to RM10.9 million or 2.6 sen per share in the second financial quarter ended March 31, 2015 (2QFY15), from RM50.7 million or 12.1 sen per share a year ago.

In its quarterly report to Bursa Malaysia, MKH (fundamental: 1.2; valuation: 3.0) said the weaker result was due to the inclusion of unrealised foreign exchange losses of RM13.8 million, and lower revenue and profit contribution from its plantation division as a result of weaker crude palm oil and palm kernel selling prices.

The group’s 2QFY15 revenue stood at RM229.72 million, risen 22% from RM188.15 million a year ago.

MKH said this was mainly contributed by the property and construction division’s on-going projects.

Cumulatively, the group recorded a net profit of RM41.03 million for the six-month period (1HFY15), fallen 39% from RM67.48 million last year; while revenue rose 18% to RM437.35 million, from RM370.64 million in 1HFY14.

In a separate statement today, MKH said its unbilled sales of properties has continued to advance by 40% on-year to RM843 million as at end-March.

The group thus said it was on track to achieve its RM850 million sales target this year, in view of healthy responses towards eight of its projects launched this year.

“Meanwhile, the group’s total gross development value (GDV) has increased to RM10.3 billion, with the recent joint-venture entered for a high-rise residential development at Jalan Tun Razak (GDV RM400 million), in addition to Mont Kiara, Puchong and Kajang town land entered late last year,” MKH said.

The group’s board of directors also expects MKH to achieve ‘satisfactory’ results for FY15, arising from the profit recognition of the on-going projects and sales locked-in the previous financial years by the property and construction division.

“Amid the challenging market environment with the softening of property market and fluctuation of CPO price, which are cyclical in nature, MKH remains optimistic of long-term market fundamentals,” the group said.

MKH fell five sen or 2.04% to RM2.40 today, giving it a market capitalisation of RM1.03 billion.

(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.)