MKH Annual Report 2018

25 MKH Berhad Annual Report 2018 PROSPECTS The Board remains optimistic, and expects the Group to achieve satisfactory results for the financial year ending 30 September 2019, mainly from the following principal business segments:- Property Development and Construction With unbilled sales of RM1.06 billion as of 30 September 2018, we are well- positioned for FY2019 with new and ongoing developments, such as Inspirasi Mont’Kiara, MKH Boulevard II, Nexus @ Kajang Station, Saville @ D’Lake, Puchong, Hillpark @ Shah Alam North, Hillpark Residence, TR Residence @ Jalan Tun Razak, Kajang 2 Precinct 2 and Kajang East Precinct 1. Our FY2019 planned launches with total estimated GDV of RM1.20 billion are in line with the government’s encouragement for a ordable housing and transit-oriented developments, comprising mainly a ordable to mid- ranged landed residential and high- rises located near the public transportation system. We continuously explore joint venture opportunities with potential partners with the aim to create value for the Group. Subsequent to FY2018, we have entered into two (2) joint ventures to develop serviced apartments with a total estimated gross development value of approximately RM1.09 billion located in Kajang and Kuala Lumpur respectively. Plantation The industry is expected to improve gradually following Indonesia's removal of crude palm oil export levy from previous USD50 per MT that will stimulate rise in palm oil trades. The crude palm oil prices have since recovered from the previous low of approximately RM1,800 to above RM2,100 per MT, and we expect demand to pick up in 2019 partly due to:- • Indonesia’s enforcement of B20 biodiesel since October 2018 • Reduction of Indian import duty for CPO from 44% to 40% in January 2019 • Malaysia’s implementation of mandatory B10 biodiesel in February 2019 We will also continue to give focus on enhancing estate management with increased implementation of mechanical-assisted collection to boost production e ciencies including oil extraction rate. Hence, we expect the Plantation Division to benefit from the above. Property Investment This division is expected to continue in providing a steady income stream to the Group by maintaining an average rental yield of approximately 5.0% per annum based on fair values of the properties as at 30 September 2018. MANAGEMENT DISCUSSION AND ANALYSIS REPORT MKH continues to expand its property footprints in strategic locations near to the advancing public transportation system across the Klang Valley EGON ironmongeries represent the first trademarked product established by our Building Materials Trading Division in FY2018