Sentoria’s FY17, FY18 earnings to be substantially stronger
KUCHING: Analysts believe Sentoria Group Bhd (Sentoria) will be able to clock in stronger figures for its financial years 2017 (FY17) and FY18 on the back of upcoming projects.
Sentoria ended FY16 on a strong note at RM33.1 million profit after tax (PAT).
This led TA Securities Holdings Bhd’s research arm (TA Securities) to believe that its FY17 and FY18 earnings are expected to be substantially stronger, driven by target sales of RM1.05 billion over FY16 to FY18, and three upcoming theme parks, scheduled for opening over the next three years.
The group is also focusing on building affordable homes in its key operating areas such as Kuantan, Kuching and Klang Valley.
“In addition, the group will also actively bid for contracts to build PR1MA homes. Recall, the group has clinched two construction contracts totaling RM110 million in March 2016, for the design and build of affordable homes in Kuantan and Sepang,” it added.
Meanwhile, on the group’s FY16 performance, in a filing on Bursa Malaysia, Sentoria stated that its pre-tax profit grew 21.7 per cent to RM45.2 million for FY16 compared with RM37.1 million recorded in FY15.
“The property development division delivered consistent profits for bothe financial years while the leisure and hospitality divisions turned around from an operating loss of RM6.6 million in the preceding financial year to a marginal loss of RM89,000 for FY16, “Sentoria said.
TA Securities noted that the group’s property development division’s revenue and earnings before interest and tax (EBIT) increased 7.2 and 4.1 per cent respectively in FY16.
“Better performance was driven by higher progress billings from development projects in Kuching and Morib, which were launched in September 2015 and early 2016 respectively,” it added.
Sentoria’s leisure division’s EBIT also improved to RM2.5 million in FY16 from a loss of RM3.2 million a year ago.
“We attribute the improvement to the group’s on-going cost rationalisation measures,” it opined.
On a quarter-on-quarter (q-o-q) basis, the group recorded a normalised net profit of RM11.6 million in the fourth quarter of FY16 (4QFY16), more than double from a profit of RM4.7 million in 3Q.
“The stronger sequential profit was largely underpinned by higher progress billing recognised from developments in Kuching and Morib and a turnaround in the leisure division,” TA Securities said.
The research team also noted that the group recorded RM228.5 million in new property sales in FY16 which indicates encouraging y-o-y growth of 141 per cent.
“Its two new resort cities, namely Borneo Samariang Resort City (BSRC) and Sentoria Morib Resort City (SMRC) are the key contributors to sales. Unbilled sales increased to RM175 million as at September 2016 from RM150 million a quarter ago,” it said.