Ken Holdings achieves flattish net profit for Q3

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PETALING JAYA (Nov 14): Developer Ken Holdings Bhd’s third quarter net profit of RM7.54 million is flattish, compared with RM7.48 million achieved in the previous corresponding period.

Revenue however, surged by 70% to RM28.01 million, from RM16.46 million a year ago.

In the announcement to Bursa Malaysia, Ken Holdings said the flattish profit was due to higher construction costs and incurred overheads.

For the nine-month period ended Sept 30, net profit increased by 20.63% this year to RM18.07 million, from RM14.98 million in the previous corresponding period.  

Cumulative revenue grew by nearly 41% to RM57.22 million, from RM40.61 million in the previous corresponding period.  

Ken Holdings noted that its property development segmental profit increased by RM16 million to RM36.8 million in the nine-month period from the corresponding period last year, mainly due to higher volume of work conducted on its Ken Rimba Jimbaran project in Shah Alam, and sales mix of higher margin units in the current year-to-date.  

The company also noted that its construction operations segmental profit at RM3.8 million, was lower due mainly to higher construction cost and overheads incurred in the current year-to-date, as compared to the preceding corresponding period profit of RM6.2 million.  

Ken Holding noted profit after tax for the current quarter was marginally higher, mainly due to higher revenue recorded during the quarter, also affected by the under provision of income tax for the preceding year — which was factored in this quarter.

Ken Holding said the Ken Rimba Condominium I project received favourable responses from its soft launch in the quarter, and is expected to contribute positively to the company’s performance for 2014.

However, it also noted that external forces such as increases in material costs, fuel and energy costs, including manpower resources in the construction sector, are expected to continue to exert pressure on the company’s operating margin.  

Ken Holdings is among Insider Asia’s stock pick. According to Insider Asia, the company enjoys one of the highest margins among property developers, with pre-tax margin of 36% for the past five years.