OSK's momentum to rebound across key segments
PETALING JAYA: OSK Holdings Bhd 's performance is expected to accelerate meaningfully in the coming quarters, driven by broad-based recovery and strong order pipelines across its core businesses.
Hong Leong Investment Bank (HLIB) Research said OSK reported a core profit after tax and minority interests (patami) of RM125.4mil in the first quarter of financial year 2025 (1Q25).
The research house noted that the results were within its expectation, making up 22% of its full-year forecast.
On a year-on-year (y-o-y) basis, OSK's pre-tax profit was flattish at minus 0.6%.
HLIB Research said the lower contribution from the property development segment attributed to lower profit margin from existing projects compared to 1Q24.
'The decline in industries was due to operating expenses tied to newly acquired factories in Johor Baru, which reported pre-tax profit of minus RM6.3mil.
'Excluding the losses, the segment would have recorded a pre-tax profit improvement of 18.6%, in tandem with the higher sales volume.
'Overall, core patami increased slightly by 2.1% due to lower taxes,' the research house said in a report yesterday.
The group's capital financing division recorded 1Q25 pre-tax profit of RM30.9mil, which was up by 18.2% y-o-y.
The positive performance was supported by the strong loan growth across all segments from conventional, civil servant and Australia.
'Loan portfolio continues to show robust momentum, growing sizeably to RM2.43bil as at March 31, 2025, which was up by 11.3% quarter-on-quarter (q-o-q).
'The q-o-q loan growth was supported by all segments: conventional (up 11.3%), civil servant financing ( up 4.8%), Australia (up 11.3%),' HLIB Research said.
The research house said on the current trajectory, the capital financing segment is poised to deliver record-high earnings in financial year 2025 and is likely to emerge as a key earnings driver, on par with the group's property segment.
Meanwhile, property sales were impacted in 1Q25 as both Chinese New Year and Hari Raya fell within the same period, resulting in fewer working days and temporary disruption in transaction activity.
'That said, momentum is expected to rebound, supported by a robust portfolio of ongoing projects and an active launch pipeline slated for the coming quarters,' HLIB Research said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
13 hours ago
- The Star
Growth likely at 4.3% in the second quarter
HLIB Research said on the demand side, growth is anticipated to be primarily led by private consumption. KUALA LUMPUR: Malaysia's gross domestic product (GDP) growth for the second quarter of this year (2Q25) is projected to hit 4.3%, driven by the agriculture sector's recovery, and expansion in the services, manufacturing and construction sectors, says Hong Leong Investment Bank Research (HLIB Research). The projection is slightly below the Statistics Department's advance estimate and consensus median forecast of 4.5%. HLIB Research said on the demand side, growth is anticipated to be primarily led by private consumption, and volatile import duties are likely to contribute positively to GDP. 'For now, we maintain our GDP growth forecast for this year at 4%, pending the release of the full 2Q25 GDP print on Aug 15,' the research house said yesterday. It said growth will be anchored by resilient domestic demand, steady employment and wage gains, and supportive fiscal measures, including a one-off RM100 cash transfer for all adults to be used from Aug 31 to Dec 31. Assuming that the entire amount of the cash transfer is spent, HLIB Research estimates that a total of RM2bil in spending would raise private consumption by 0.2 percentage points. 'Nevertheless, downside risks to growth persist, stemming from global trade headwinds and policy uncertainty,' it said. Meanwhile, Maybank Investment Bank Research also predicted Malaysia's GDP in 2Q25 to be at 4.3%, reflecting slower growth in the services and construction sectors, firmer performances from the manufacturing and agriculture sectors, and smaller contraction in the mining sector. — Bernama
The Star
13 hours ago
- The Star
Employment trend likely to remain resilient
HLIB Research said the country's labour market remained relatively insulated from external pressures. PETALING JAYA: The labour market is expected to remain steady, buoyed by a resilient employment trend and policy support, even as global trade risks intensify, say economists. They said sustained job creation and rising household incomes would continue to underpin domestic consumption, cushioning the economy against external uncertainties. According to Hong Leong Investment Bank (HLIB) Research, the country's labour market continued to demonstrate resilience against mounting external headwinds, suggesting that it remained relatively insulated from external pressures. 'Steady employment conditions, alongside accommodative government policies, are expected to provide additional support to household spending in the near term,' the research house added. However, it said: 'The global shift towards protectionist trade measures poses downside risks to overall growth, particularly for export-oriented sectors, with potential spillover effects on domestic demand.' It maintained its 2025 gross domestic product (GDP) growth forecast at 4%. TA Research noted that year-to-date, total employment averaged 16.8 million in the first half of 2025, an increase of 2.9% year-on-year (y-o-y). Unemployment averaged 527,200 persons, down 5.2% from the same period last year. 'We expect the unemployment rate to average around 3% this year,' it said. It emphasised that a strong labour market is crucial to sustaining private consumption – the main engine of GDP. It also highlighted structural improvements in job quality, stating that 'rising household income and better job quality will help strengthen domestic demand and support more inclusive growth, aligned with the Madani Economy goals.' Under the 13th Malaysia Plan, the government aimed to reduce foreign worker dependence from around 15% to 10% by 2030, and further to 5% by 2035, while creating 1.2 million new jobs in manufacturing and the digital economy. Other targets include raising labour's share of GDP and compensation of employees to 40% and achieving a 70% graduate job-match rate. The Statistics Department reported that the labour market remained solid in June despite intensifying global trade tensions and an uncertain external environment. The unemployment rate held steady at 3%, with the number of unemployed persons declining 6.3% y-o-y and 0.7% month-on-month. Employment growth accelerated slightly to 3% y-o-y, with gains spread across all sectors – services, manufacturing, construction, mining and agriculture. Within services, job gains were most pronounced in accommodation, food and beverage services, and the information and communication sector, reflecting firm tourism demand and digital activity. The number of own account workers rose 0.6% month-on-month, while those temporarily not working fell to 90,100 persons. Active job seekers declined to 414,400 from 416,400 in May. This broad-based hiring momentum, coupled with ongoing government initiatives, has kept the labour market on a firm footing despite a less favourable global trade backdrop.
The Star
16 hours ago
- The Star
Carlsberg all out to sustain margins
Carlsberg Malaysia managing director Stefano Clini. SHAH ALAM: Carlsberg Brewery Malaysia Bhd (Carlsberg Malaysia) aims to preserve its profit margins amid expectations of higher than usual depreciation costs in the medium term. The group expects heightened depreciation costs on a major upgrade that was due and was carried out in its production line last year. Carlsberg Malaysia's managing director Stefano Clini also said the group had announced a slight increase in product prices recently in order to sustain its margins. 'The increase in prices may have a short-term effect in demand perhaps for a couple of months, while there are some uncertainties on the consumer confidence front. We do not know if this will improve at this point in time,' Clini said at a press conference announcing its quarterly results yesterday. 'Our job is to protect our margins. We do not have a target to improve it further, but we do want to ensure it does not deteriorate. 'Aside from pricing, we also tackle this through our product mix such as premium brands and value management. We believe we have been successful so far and we hope margins will be protected moving forward,' he added. Carlsberg Malaysia's chief financial officer Vivian Gun also took note of several tailwinds in the group's favour, including a ringgit that is at present marginally stronger, and raw material prices which have eased recently. 'These factors help but we are not sure how long they will last. The currency can fluctuate up and down on different days just like what had happened in the third quarter last year where there was a sudden sharp appreciation and it dropped again after that. 'Our price hike is to protect our margins for a more sustainable future. We also try to anticipate any volatility that may come,' Gun said. Carlsberg Malaysia reported an increase in net profit of 3.2% year-on-year (y-o-y) to RM81.9mil despite a 3.4% y-o-y decline in revenue to RM490.2mil for the second quarter ended June 30, 2025 (2Q25). This set of results was due to the effects of lower tax expenses for the quarter, it said. With its earnings per share at 26.80 sen, it also announced a dividend of 20 sen per share. This brings the cumulative interim dividend to 43 sen per share for the financial year ending December 2025 (FY25). Its Malaysia operations registered a higher revenue and profit from operations in part due to a lower base in the same quarter last year, resulting from trade purchases in March last year ahead of the price increase. Meanwhile, Carlsberg Malaysia said its Singapore operations saw a decline in revenue and profit from operations due to the softer on-trade performance and intensified competitive pricing pressure in the market, amid cautious consumer sentiment and subdued discretionary spending. Clini said he is satisfied with the group's performance for the first half of the year despite the lower sales due to the shorter Chinese New Year timing. 'Our continued focus on our disciplined discount management and also operational efficiency demonstrates the resilience of our business strategy amid the challenging and subdued local market, giving us the confidence to keep investing behind our brands,' he further said.
