It is planning a one-for-10 rights issue that could raise up to RM85.81 million to fund its property development activities, is aiming to double its profit in FY17 as it expects its plantation segment to perform better in view of the stronger CPO price.
The group entered the plantation business in 2008 and operates 18,000ha of plantation land in East Kalimantan, Indonesia.
With the better CPO price, the group foresees its annual palm oil yield to grow from an average of 25 tonnes/ha to 28 tonnes/ha.
In FY16, MKH posted a net profit of RM205.09 million, up 136% from RM86.96 million a year ago, as revenue rose 22% to RM1.28 billion from RM1.04 billion. In the same period, its plantation segment posted a profit before tax of RM64.26 million.
On its property segment, MKH is optimistic that it can “easily achieve” an 80% take-up rate for all its property development projects moving forward, despite a slowdown in the economy and the property sector.
MKH will launch RM1.6 billion worth of properties in 2017, with a sales target of RM900 million.
About 73% of the group’s upcoming launches are located in Greater Kuala Lumpur, where “genuine home buyers’ demand remains strong”, although it will continue to focus on developing affordable properties within the Kajang-Semenyih vicinity.
Among the projects it plans to launch are integrated high-rise developments like TR Residence in Kuala Lumpur and Saville @ Mon’t Kiara, which carry a GDV of RM400 million and RM430 million respectively.
Meanwhile, MKH’s proposed one-for-10 rights issuance comes together with a two-for-one bonus issue that could raise the fund mentioned earlier at an indicative price of RM1.89 per rights share to fund its development projects.
It also intends to use the funds raised from the exercise to finance infrastructure related to its property development, as well as for payment of landowners’ entitlements, construction of a KTM commuter station in Kajang, and working capital.
The renounceable rights issue comprises 45.4 million new shares of RM1 each at an issue price to be announced later. The bonus issue, meanwhile, would consist of 90.81 million new shares.