MK Land Q3 profit jumps more than two-fold

PETALING JAYA: MK Land Holdings Bhd's net profit jumped more than two-fold to RM7.2mil for the third quarter ended March 31 against RM2mil a year ago due to stronger performance of the property segment.

Its revenue for the period rose to RM165.1mil from RM94.7mil a year ago.

Going forward, MK Land's executive chairman Tan Sri Mustapha Kamal expects “double-digit growth” buoyed by its on-going property projects and new launches.

In a briefing yesterday, Mustapha said the “momentum” for the group to achieve double-digit growth was already in place.


MK Land’s incoming CEO Lau Shu Chuan with Tan Sri Mustapha Kamal.

For the nine months ended March 31, MK Land posted a higher net profit to RM15.8mil on revenue of RM292.9mil.

The higher net profit was due to higher revenue and lower finance cost.

Its property development segment generated RM249.5mil, representing 76.2% of the total revenue for the nine months ended March 31. The revenue was mainly from its property projects in the Klang Valley, particularly its Damansara Perdana development.

MK Land had also appointed Lau Shu Chuan as its chief executive officer effective June 1, taking over from Mustapha. Lau is currently the chief operating officer. Mustapha will be redesignated as non-executive chairman.

Mustapha made a comeback as executive chairman on June 25, 2008 when the company was facing difficulties. The company posted a net loss of RM60mil for the financial year ended June 30, 2008 (FY08). He managed to steer the company out of turbulence and felt that it was time to pursue his charity works through his foundations - Yayasan Emkay Foundation, Orang Utan Island Foundation and Pulau Banding Foundation.

“I do not want you to speculate. There's no other reason,” he said when explaining his leave from the company. Mustapha will remain as the major shareholder of MK Land.

Lau agrees with Mustapha on the company's prospects. He said its products were well accepted in the market and that the group had a landbank of 5,000 acres with various developments.

On its gearing level, Lau said MK Land had managed to bring down its borrowing significantly. Its total borrowing stood at RM275mil against its shareholders fund of RM1.1bil.

“We will bring it (borrowings) lower. Our interest is eating into our profit. We have a systematic plan to bring down the gearing level,” he said. Lau, however, said the company's borrowings might increase as it bought new landbank and to finance its joint venture project to develop affordable housing in northern Bangalore, India.

Meanwhile, he said MK Land's shares were “undervalued”. He said the price, at over 30 sen, was still below the company's net tangible assets (NTA). As at March 31, MK Land's NTA stood at 87 sen per share.

By The Star