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.
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