OSK Holdings Bhd's net profit dropped 25.14% year-on-year to RM97.45 million in the fourth quarter ended Dec 31, 2020 (4QFY20), compared with RM130.17 million a year ago, despite posting a higher revenue.
OSK's revenue, meanwhile, grew by 15.1% to RM335.54 million from RM291.53 million in 4QFY19, thanks to its property segment, according to its filing with Bursa Malaysia.
The company also proposed a single-tier final dividend of three sen per share of which the dates of entitlement and payment will be announced in due course.
The group noted that its property segment's revenue grew 35% to RM230.91 million from RM171.45 million, mainly contributed by its ongoing projects and completed projects in Malaysia.
"The share of profit in 4QFY20, amounted to RM7.9 million, was contributed by the development of Melbourne Square in Melbourne, Australia compared with RM12.3 million recorded from the share of profit of the development of Agile Mont Kiara in 4QFY19.
"The property investment division recorded an impairment loss on property, plant and equipment and a fair valuation loss on investment properties amounting to RM29.5 million in 4QFY20," said OSK.
Apart from that, the group said the division continued to generate steady rental income from its office buildings, while operations of the retail shopping gallery remained challenging.
On a quarterly basis, net profit decreased slightly by 7.37% from RM105.21 million, while revenue inched up 4.97% from RM319.67 million in 3QFY20.
For the full year ended Dec 31, 2020 (FY20), net profit declined by RM339.34 million from RM412 million in the previous year, while revenue fell 10.1% to RM1.09 billion from RM1.21 billion.
On prospects, it said the performance from the property development division will continue to be supported by sales and progress billings from ongoing projects which have successfully secured high take-up rates.
"The property investment division is expected to generate a steady rental income stream from the offices at Plaza OSK and Faber Towers. Rental and occupancy at our Atria Shopping Gallery will continue to be under pressure with the contracting retail sales and the implementation of MCO (Movement Control Order) in January 2021 may hastened the closure of more stores.
"The construction division will continue to deliver our current outstanding order book of RM196.7 million as at Dec 31, 2020 while targeting to replenish new orders from pipeline projects from the property division. The segment will continue to focus on our internal projects and strive to ensure that our projects are delivered within the stipulated time, quality and at the same time optimising the development cost," said the group.
Barring any prolonged economic slowdown, the group said it is confident of performing satisfactorily in FY21.
Shares of OSK slipped 1.16% or one sen to 85 sen, giving it a market capitalisation of RM1.78 billion.
Source: The Edge Markets
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