Melati Ihsan sees rise in property, construction activity in 2019

Last update: 28/12/2018

KUALA LUMPUR, Dec 28 (Bernama) -- Construction engineering company Melati Ehsan Holdings Bhd expects to see an increase in property and construction activity in 2019 amid the better economic outlook brought about by the government’s initiative to uplift the people’s wellbeing.

Executive Chairman Tan Sri Yap Suan Chee said the outlook for the local construction sector is promising and would benefit industry players.

“For the property development segment, developers remain cautiously optimistic on the current market situation and we expect that there will be a period of adjustment and consolidation to clear existing property stock before an uptrend can be seen.

“The present challenging conditions in the property segment are due mainly to the mismatch of housing demand and supply in the market,” he said in the company’s annual report to Bursa Malaysia.

Nevertheless, he said, amid challenges in the local property sector, the market still offers pockets of opportunities for developers to replenish their land bank in anticipation of a recovery.

And, due to a clearer economic and political direction, certain developers may still implement projects that they had planned or announced earlier, Yap noted.

“We expect positive interest from potential buyers especially in the Klang Valley when it comes to affordable pricing projects or mid-range products.

“Development schemes with the right mix of factors that include location, lifestyle concept, pricing and marketing strategies will perform reasonably well and attract buyers,” he added.

The board of directors is optimistic about the group’s ability to continue to achieve a satisfactory performance for the financial year ending Aug 31, 2019.

Melati Ehsan recorded revenue of RM287.85 million and pre-tax profit of RM3.20 million in the financial year ended Aug 31, 2018.

The revenue represents a 71.29 per cent increase over the RM168.00 million in the previous financial year.

However, the group’s profit before tax decreased by 18.09 per cent in the current financial year despite the increase in revenue, due mainly to the decrease in gross profit margin.

It recommended the payment of a first and final single tier dividend of 1.0 sen per ordinary share (2017: single tier dividend of 1.0 sen per ordinary share), amounting to RM11.9 million with respect of the financial year ended Aug 31, 2018, subject to the shareholders’ approval at the forthcoming Annual General Meeting.