MKH Annual Report 2020

25 MKH BERHAD Management Discussion and Analysis Report SEGMENT RESULTS AND ANALYSIS Property Development and Construction The Group’s revenue was driven by this segment with the contribution from eleven (11) projects located in Kuala Lumpur, Mont Kiara, Kajang, Semenyih, and Hillpark @ Shah Alam North of which three (3) projects were launched in FY2020, namely, Kajang East Avenue and Precinct 1 - Phase 3A, Hillpark Aspirasi @ Hillpark Shah Alam and MIRAI Residences @ Kajang 2 Precinct 1 and these three (3) projects have contributed 49% of the total FY2020 new sales of RM446.6 million (FY2019: RM823.5 million). The average take up rate of Hillpark Aspirasi @ Hillpark Shah Alam and MIRAI Residences @ Kajang 2 Precinct 1 Phase 1 were 73% and 68% respectively. This division achieved lower revenue and PBT of RM561.8 million (FY2019: RM775.9 million) and RM73.8 million (FY2019: RM122.2 million) respectively mainly due to lower revenue and profit recognition in the 3rd quarter ended 30 June 2020 as a consequence of the disruption of the physical construction work on ongoing projects during the implementation of MCO and CMCO from 18 March 2020 to 9 June 2020 and higher share of losses of associated companies of RM5.1 million (FY2019: RM0.9 million). Hotel and Property Investment For FY2020, this division recorded a lower revenue of RM25.0 million (FY2019: RM31.2 million) and loss before tax of RM8.0 million (FY2019: PBT of RM1.8 million) due to inclusion of higher loss on changes in fair value of investment properties totalling RM12.2 million in FY2020 (FY2019: RM6.2 million), reduction in average rental rates for certain tenants during the MCO and CMCO periods in order to assist the tenants and the newly refurbished 3-star hotel namely RHR Hotel @ Kajang has yet to achieve its breakeven occupancy rates. Good Average 80% As at 30 September 2020, the Group has locked-in unbilled sales value of RM1.02 billion (FY2019: RM1.12 billion) which was mainly contributed from the ongoing development projects namely Hillpark Shah Alam, Kajang 2 Precinct 2, TR Residence, Inspirasi @ Mont Kiara, Kajang East Precinct 1, MKH Boulevard 2, Nexus @ Kajang Station, Bandar Teknologi Kajang Shops, Hillpark 3 Phase 1B Shops, Kajang East Avenue Shops and MIRAI Residences @ Kajang 2 Precinct 1. The Group is well positioned to unlock the value of its existing development landbank which are strategically located in Kuala Lumpur, Kajang, Semenyih and Puncak Alam vicinities. Paired with good product design and strategic location with essential lifestyle amenities, our ongoing projects recorded a good average take up rate of 80%.