This article first appeared in The Edge Financial Daily on November 26, 2019

KUALA LUMPUR: OSK Holdings Bhd’s net profit jumped 69.4% to RM107.58 million for the third quarter ended Sept 30, 2019 (3QFY19), from RM63.52 million a year ago, mainly contributed by its property and financial services segments.

This resulted in higher earnings per share of 5.18 sen for 3QFY19 compared with 3.06 sen for 3QFY18.

This was despite a 10% drop in quarterly revenue to RM315.72 million, from RM351.24 million for 3QFY18, it said in a filing with Bursa Malaysia yesterday.

OSK said its property segment enjoyed a 2.15 times jump in pre-tax profit due to a higher share of profit of associated companies and a reversal of costs provided no longer required upon the completion of certain projects, while the capital financing division improved due to a higher interest income generated from a higher loan disbursement.

Its construction segment’s profitability decreased due to lower contributions from ongoing projects — Windmill, TimurBay and Iringan Bayu. Its industries segment’s profit was weaker due to sales achieved on a different product composition.

The hospitality segment reported a loss for the current quarter as the profit earned from the sale of membership in Vacation Club was insufficient to cushion losses from the hotel operations. The hotel operations continued to suffer from low occupancy and room rates.

The improved quarterly earnings lifted the group’s net profit for the cumulative nine months (9MFY19) by 45.4% to RM281.84 million, from RM193.84 million a year ago. Its revenue rose 3.3% to RM915.99 million versus RM886.68 million for 9MFY18.

In a separate statement, OSK executive chairman Tan Sri Ong Leong Huat said the board of directors is confident that the group will deliver strong results for the remainder of the year despite a challenging market.

In 4QFY19, the group will launch two new phases of double-storey terrace houses at the Iringan Bayu township in Seremban, and 32 units of single-storey bungalows at Bandar Puteri Jaya in Kedah, with a combined gross development value (GDV) of RM134.37 million.

As at Sept 30, 2019, OSK had unbilled sales of RM1.69 billion with minimal unsold completed stocks, and its land bank at 1,722 acres (696.87ha) with an estimated effective GDV of RM10.6 billion in the Klang Valley, Sungai Petani, Butterworth, Kuantan, Seremban and Melbourne, Australia.