Quarterly Analysis – OCR Group Berhad (7071)
OCR Group Berhad reported a revenue of RM34.0 million and a profit before tax (PBT) of RM0.86 million for the quarter ended 31 March 2024. This represents a slight decrease compared to the revenue of RM35.9 million and PBT of RM0.88 million in the same quarter of the previous year.
The decline in revenue is primarily due to the completion of a significant construction project in 2023, with no new construction projects commencing in the current financial year. However, this was offset by robust growth in the Property Development segment, which saw a 45% increase in revenue, driven by ongoing projects such as Isola KLCC and The Mate.
In terms of expenses, the cost of sales decreased from RM29.84 million in Q1 2023 to RM28.40 million in Q1 2024, reflecting the lower revenue from the construction segment. Other income increased from RM1.02 million to RM1.66 million, contributing positively to the overall profitability. Administrative expenses saw a slight increase from RM4.32 million to RM4.37 million, while finance costs rose from RM1.28 million to RM1.42 million, indicating higher interest expenses. Depreciation and amortisation increased slightly from RM0.56 million to RM0.60 million.
Despite these changes, the company’s total comprehensive income increased slightly from RM0.33 million to RM0.36 million, with fair value loss on equity instruments being a significant factor. Earnings per share for both basic and diluted remained at 0.07 sen, up from 0.01 sen in Q1 2023.
Looking ahead, Malaysia’s economy showed a 4.2% GDP growth in Q1 2024, driven by resilient domestic expenditure and robust external demand. The property development industry is expected to benefit from this economic stability, enhancing consumer confidence and increasing investment in real estate projects. OCR Group Berhad plans to maintain its focus on project delivery and completion while exploring new collaborations. A notable new project for FY2024 is Residensi Akasia, an affordable housing initiative under the Rumah Selangorku scheme, with a gross development value of RM287.3 million, targeted for Q3 2024.
In addition to their financial performance, OCR Group Berhad announced a series of corporate proposals on 13 December 2023 aimed at strengthening the company’s financial position and capital structure.
These proposals include a settlement of advances amounting to RM43.30 million owed by Stack Builder Sdn. Bhd., a 50.5%-owned subsidiary, to Ong Kah Hoe (OKH) and Tan Chin Hoong (TCH). This will be settled via the issuance of 618,525,646 new ordinary shares in OCR at an issue price of RM0.0700 per share. Additionally, a renounceable rights issue of up to 1,336,348,534 new shares along with up to 1,336,348,534 free detachable warrants has been proposed, based on 2 Rights Shares together with 2 Warrants E for every 3 existing shares held by entitled shareholders.
To conclude, OCR Group Berhad has demonstrated stable performance amidst the completion of significant projects and economic fluctuations. The shift in revenue composition towards property development indicates a strategic focus on long-term, sustainable growth. The Group's financial health remains robust, with a stable balance sheet and proactive management of operating and financing activities. Future prospects appear positive, supported by new projects and a favorable economic environment.
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