MK Land Holdings Bhd. :8893-MY: Earnings Analysis: 2017 By the Numbers : September 13, 2017

MK Land Holdings Bhd. reports financial results for the year ended June 30, 2017.

We analyze the earnings along side the following peers of MK Land Holdings Bhd. – Tropicana Corp. Bhd. (5401-MY) that have also reported for this period.

Highlights

  • Gross margins widened from 47.18% to 65.14% compared to the same period last year, operating (EBITDA) margins now 20.93% from 8.63%.
  • Year-on-year change in operating cash flow of -273.02% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2017 2016 2015 2014 2013
Relevant Numbers (Annual)
Revenues 222.61 287.17 497.94 502.18 481.01
Revenue Growth (YOY) N/A N/A N/A N/A N/A
Earnings 18.13 16.33 53.96 65.7 40.35
Earnings Growth (YOY) 11.05 -69.74 -17.86 62.84 66.68
Net Margin 8.15 5.69 10.84 13.08 8.39
EPS 0.02 0.01 0.05 0.06 0.03
Return on Equity 1.56 1.41 4.67 5.84 3.7
Return on Assets 1.06 0.88 2.76 3.34 2.06

Access our Ratings and Scores for MK Land Holdings Bhd.

Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from 47.18% to 65.14% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from 8.63% to 20.93% compared to the same period last year. For comparison, gross margins were 47.18% and EBITDA margins were 8.63% in the last reporting period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings

8893-MY‘s change in operating cash flow of -273.02% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from 5.31% to 17.09% and (2) one-time items. The company’s pretax margins are now 17.09% compared to 11.20% for the same period last year.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for MK Land Holdings Bhd.

Company Profile

MK Land Holdings Bhd. engages in the real estate business and provision of management services. It operates through the following segments: Property Development and Related Activities; Leisure; Educational; and Investment Holding. The Property Development and Related Activities segment constructs and markets mixed properties. The Leisure segment manages and operates resorts, hotels, golf courses, and theme parks. The Educational segment offers training programs. The Investment Holding segment deals with the firm’s investments in properties and subsidiaries. The company was founded by Mustapha Kamal bin Abu Bakar and Kasi K. L. Palaniappan on August 2, 1978 and is headquartered in Petaling Jaya, Malaysia.

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