ROAD Builder (M) Holdings Bhd has performed to analysts' expectations, posting a second consecutive year of record core earnings.
For the financial year ended June 30, Road Builder's group turnover rose 28% to breach the RM1bil mark for the first time at RM1.23bil on stronger performance in all core divisions.
The group recorded a 21% increase in operational profit before interest charges to RM230mil.
In a statement to the KLSE yesterday, Road Builder said the drop in group pre-tax profit to RM200.4mil from RM217.4mil in the 2002 financial year was attributable to exceptional items totalling RM69.4mil recorded in the last financial year.
“Excluding these one-off gains, underlying group pre-tax profit is up 35% year-on-year. Likewise, core net profit (after adjusting for non-core exceptional impacts) rose 34% to RM115.2mil in financial 2003,” a company official said.
He said the bulk of the net gains of RM69.4mil in financial 2002 was mainly attributable to a 30% equity participation in RB Land Sdn Bhd by the Government of Singapore Investment Corp (GIC), and without the exceptional items, the group profit before tax would be RM148mil in the previous financial year.
In financial 2003, Road Builder's construction division remained the key earnings driver with total construction billings of RM883mil, up 34% from the 2002 financial year. Construction earnings before interest and tax (EBIT) rose 48% to RM147mil on a 34% increase in revenue to RM883mil.
The toll road division posted a 29% improvement in EBIT to RM26.2mil while the properties division showed a 5% rise to RM30.5mil, but port division remained flat at RM32mil.
Commenting on the group results, Road Builder executive vice-chairman Tan Sri Chua Hock Chin said the recurring income divisions of toll roads and ports contributed to 25% of the overall group's pre-tax profits.
“The group will continue to stay focused on building up its four core businesses, particularly the two stable, recurring income divisions. We expect contribution from the two businesses to rise to about 45% over the next two years as the group's second toll road – New Pantai Expressway – is expected to be completed by April next year,” he told StarBiz yesterday.
The RM1.2bil, 20km NPE toll road would provide an alternative to the Federal Highway, as it opens up a third direct connection between Kuala Lumpur and Petaling Jaya.
The highway originates in the heart of Subang Jaya, passes through Bandar Sunway and PJ South, and joins Jalan Bangsar near the Abdullah Hukum LRT station, while another link will connect with the KL-Seremban Highway at Jalan Kuchai Lama.
An analyst with a local research house said without the non-recurring exceptional item, it was a commendable performance for Road Builder as all its core divisions showed all-round growth.
“The group should be able to break another record next year if it is able to meet its target of achieving RM1bil in its construction order book over the next 12 months, and with the coming on stream of the NPE,” he added.