The decline in revenue was also attributed to a strict bank lending environment
By PRIYA VASU / Pic By MUHD AMIN NAHARUL
MAH Sing Group Bhd sold RM1.1 billion of properties for the financial year ended Dec 31, 2020 (FY20), as the property developer posted earnings that halved to RM100.39 million from RM200.33 million posted in FY19.
In a filing to the stock exchange yesterday, Mah Sing noted that its revenue slipped to RM1.53 billion from RM1.79 billion previously due to the lingering impact of the Movement Control Order (MCO) and Conditional MCO introduced last year to combat the Covid-19 pandemic.
The decline in revenue was also attributed to a strict bank lending environment which impacted sales conversion.
For FY20, Mah Sing’s revenue from property development was RM1.2 billion compared to RM1.4 billion in FY19, while operating profit was RM148.1 million and RM254.6 million respectively for FY20 and FY19.
The major development projects which contributed to the group’s earnings included M Vertica in Cheras, M Centura in Sentul, Southville City in Kuala Lumpur (KL) South, Meridin East in Johor and Lakeville Residence in Jalan Kuching.
Other projects were M Oscar in Kuchai Lama, M Aruna in Rawang, M Luna in Kepong, M Adora in Wangsa Melawati, all in the Klang Valley, and the Ferringhi Residence and Southbay City in Penang, as well as Sierra Perdana, Meridin @ Medini and Mah Sing i-Parc in Johor.
Contribution from matured projects like Lakeville was lower as it was completed during the current year, while new projects such as M Oscar, M Arisa, M Luna and M Adora were at initial stages of construction with minimal contribution, Mah Sing noted in its exchange filing yesterday.
The performance of the development segment was also impacted by the impairment and write-offs of certain assets, as well as the fair value loss on investment property totalling RM25.9 million.
The group’s plastics manufacturing segment recorded a revenue of RM288.2 million and operating profit of RM17.2 million in FY20 compared to a revenue of RM327.1 million and operating profit of RM20.3 million in FY19.
The lower revenue and operating profit last year were mainly due to lower orders for automotive parts pursuant to the suspension of automotive production during partial lockdown in Indonesia.
Mah Sing’s hotel segment posted a revenue of RM13.3 million in FY20 compared to RM11.4 million revenue in FY19.
The division’s operating loss was lower at RM14.6 million compared to RM28.8 million loss in FY19, mainly attributable to lower depreciation and impairment charges on the hotel operating assets totalling RM8.8 million.
The performance of the segment was impacted by the impairment charge of RM10.2 million for its operating assets in the current year.
Mah Sing has set a higher sales target of RM1.6 billion for 2021 and has priced 91% of its product offerings at below RM700,000 and 51% below RM500,000.
Planned new launches for 2021 include Tower E of M Vertica, Cheras, remaining phases of M Arisa, Sentul, Phase 2 of Cerrado Suites and Tower B Sensory Residences at Southville City @ KL South, Phase 3 of M Aruna and M Panora in Rawang, M Senyum in Bandar Baru Salak Tinggi, Sepang, service apartments in Southbay City, Penang and double-storey link homes in Meridin East, Johor Baru.
Mah Sing recently launched the “Home with Mah Sing” campaign that offers easy payment schemes and various incentives to ease homeownership.
Mah Sing shares closed unchanged at 79 sen yesterday, valuing the property developer at RM1.9 billion.