Monday 27 May 2024
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KUALA LUMPUR (Nov 18): PJ Development Bhd's (PJD) net profit for the third quarter ended Sept 30, 2016 (3QFY16) stood at RM532,000.

This marks a 69.6% drop from a year earlier when its net profit stood at RM17.48 million.

After PJD was acquired by OSK Holdings Bhd, it changed its financial year end from June 30 to Dec 31.

In a bourse filing today, PJD attributed the decline to significant lower contributions from all but two of its main businesses, including the cable and hospitality segments.

The sectors which dragged down PJD's net profit were the property and construction segments as well as the industrialised building system (IBS) division.

PJD's 3QFY16 revenue dropped 21% to RM166.71 million from RM210.95 million a year ago. The group attributed this to lower contributions from its property segment and IBS division, which were, however, partially offset by higher income from its cables, construction and hospitality businesses.

PJD said its property division posted revenue of RM43.92 million and pre-tax loss of RM1.13 million in 3QFY16, compared with revenue of RM109.5 million and pre-tax profit of RM18.87 million a year ago.

"The performance of the division was affected by fewer number of property development projects in progress after completion of certain projects," it said, adding that new projects were not launched in view of the lacklustre property market condition.

Meanwhile, the construction segment posted revenue of RM36.9 million and pre-tax profit of RM1.26 million in 3QFY16 compared with revenue of RM47.34 million and pre-tax profit of RM3.71 million in the previous year.

The 22% decrease in revenue, according to the group, was mainly due to lower intra-group construction revenue after some projects had reached its final stages of completion.

"[The 66% drop in the division's pre-tax profit] was due to lower profit margin contribution from the ongoing projects," it said.

On the other hand, the cables division's revenue in 3QFY16 rose 26% to RM66.76 million from RM52.86 million a year ago, with pre-tax profit registering a 63% growth to RM6.85 million from RM2.65 million.

"The better performance was due to higher demand for its products from the property, infrastructure and power supply sectors," PJD said.

The IBS division registered revenue of RM10.69 million and pre-tax profit of RM2.25 million in 3QFY16, a decline of 23% and 47% respectively compared to a year earlier, mainly due to weak demand from the property market and higher overload costs at its factory.

On the other hand, PJD's hospitality segment posted a 4% rise in revenue to RM31.36 million in 3QFY16 from RM30.23 million a year ago, and a 16% growth in pre-tax profit to RM520,000 from RM450,000.

PJD attributed the improvements to higher vacation club membership subscription rates and higher occupancy rates for its hotel in Sydney, Australia.

It is worth noting that PJD's main operations are in Malaysia and Australia, with additional presence in Singapore, Thailand, Vietnam and British Virgin Islands.

On outlook, the group is of the view that the rest of FY16 remains challenging in view of the economic climate in Malaysia. However, it expects year-end results to be satisfactory.

"The property development segment will continue to be supported by the launched projects. However, the board does not expect any significant pickup in the pace of sales as the market is likely to remain subdued as compared to previous years," it said.

"The property investment division would continue to derive steady lease rental income from our commercial and retail tenants," it added.

On its construction segment, PJD expects its order book to remain healthy in view of newly-secured construction orders during the year.

Its industries segment, meanwhile, is expected to perform satisfactorily despite the slowdown in the IBS division deliveries. "However, the cables division is expected to do well," it said.

"The hospitality segment should perform better in the last quarter of this year as we enter the annual holiday season," it added.

PJD's share price traded unchanged to close at RM1.50 today, giving it a market value of RM793.27 million.


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