KUALA LUMPUR (Nov 30): OSK Holdings Bhd’s net profit for the third quarter ended Sept 30, 2021 (3QFY21) fell 25.44% to RM79.89 million from RM107.14 million in the previous year, as the group’s operations were impacted by the Movement Control Order (MCO) resulting in lower productivity.

Consequently, the group posted lower earnings per share of 3.87 sen compared with 5.24 sen.

OSK’s quarterly revenue dropped 31.38% year-on-year to RM219.36 million from RM319.67 million, according to the diversified group’s filing with the local bourse Tuesday.

Its property segment’s revenue shrank 41% to RM134.1 million and pre-tax profit decreased 47% to RM21.5 million in 3QFY21 mainly due to lower sales and slower construction work done for all local projects.

Reviewing its performance, OSK said the property investment division posted a pre-tax loss in 3QFY21 compared to a pre-tax profit in 3QFY20 due to lower average occupancy rate for retail mall.

It said that in addition, the rental concession to the affected tenants for the current year was granted in 3QFY21.

“The construction segment focused on the internal projects from property development division. The lower construction work done for these projects during NRP [National Recovery Plan] period has affected the performance of this division resulted in a pre-tax loss of RM0.5 million for 3QFY21 versus a pre-tax profit of RM5.1 million in 3QFY20.

“The industries segment recorded a slight decrease in revenue by 2% to RM42.4 million in 3QFY21 mainly due to the lower deliveries for both cables and wall panels in Malaysia which was cushioned by higher deliveries of wall panels to Singapore. The segment posted a higher pre-tax profit mainly due to improvement in collections which has resulted in write-backs of allowance for doubtful debts of RM0.4 million in 3QFY21 compared to the provision of doubtful debts of RM2.1 million in 3QFY20. The 3QFY21 pre-tax profit for the segment continued [to be] affected by the escalation in the raw material prices which could not be recovered through higher selling price,” said OSK.

OSK said its hospitality segment's performance continued to be impacted by the consequences of the movement restrictions in 3QFY21.

“The hotel division recorded a decrease in revenue by 77% to RM1.7 million and widened its pre-tax loss by 40% to RM6.6 million mainly due to the low occupancy rate as a result from NRP that restrict the inter-district and inter-state travels, unlike 3QFY20. [The] vacation club division recorded a slight decrease in revenue by 6% to RM4.2 million but an increase in pre-tax profit by 22% to RM0.7 million mainly due to lower operating expenses as a result of [fewer] promotion events as well as lower interest incurred in 3QFY21 compared to 3QFY20,” it said.

Meanwhile, its investment holding division recorded a pre-tax profit of RM59.1 million in 3QFY21. “The pre-tax profit was mainly derived from a share of profit in RHB of RM61.9 million in 3QFY21 compared with RM60.6 million in 3QFY20 to the group,” OSK explained.

On a quarter-on-quarter basis, OSK’s 3QFY21 net profit declined by 22.9% from RM103.61 million in 2QFY21, as revenue fell by 17.91% from RM267.21 million in the immediate preceding quarter.

In contrast, the group’s cumulative nine months ended Sept 30, 2021 (9MFY21) net profit grew 22.85% to RM299.91 million from RM244.13 million a year ago, while revenue was up by 8.21% to RM811.53 million from RM749.97 million.

Looking ahead, the group said it is expected to continue to perform satisfactorily for the remaining FY21, on the back of strong economic recovery.

At the midday break, OSK’s shares were unchanged at 86 sen. This gave the group a market capitalisation of RM1.79 billion.