Gadang posts quarterly net profit of RM3.7mil

The group is involved in civil engineering and construction, property development, water supply, and mechanical and electrical engineering services. (File pic shows Gadang construction.)

PETALING JAYA: Gadang Holdings Bhd posted a RM3.7mil net profit for its fourth quarter ended May 31, 2021 (Q4FY21) compared with a loss of RM259,000 a year ago, while revenue was 32% higher to RM152.3mil.

The group is involved in civil engineering and construction, property development, water supply, and mechanical and electrical engineering services.

In a filing with Bursa Malaysia, the company said the improved Q4 earnings were due to its construction and utilities divisions, while the higher revenue was mainly due to the property division’s better sales for some ongoing projects.

For FY21, the group’s net profit dropped 71% year-on-year to RM10.25mil from RM35.5mil in FY20, while revenue was 15% lower to RM574.75mil mainly due to lower contribution by both the construction and property divisions.

In FY21, its construction division has seen the completion of major projects in the preceding year and lower profit margins for ongoing projects, while the impact of the Covid-19 pandemic had resulted in suspended and deferred project progress, resulting in higher implementation costs.

“The additional Covid-19 related costs incurred, such as recurrent screening tests, workplace sanitisation, purchase of face masks and additional personal protective equipment, have also contributed to the increase of project cost.”

Gadang also noted that its property division saw lower profit margins from the sale of affordable residential projects and impairment loss on inventories.

The group has proposed a first and final dividend of 0.3 sen per share for FY21.

On its prospects for FY22, Gadang said outcomes would depend largely on the duration of the Covid-19 pandemic, economic recovery, and current political situation.

“Order book replenishment prospects are expected to be challenging due to the reduction in government infrastructure spending.”

Its construction division’s outstanding order book stands at RM425mil.

Meanwhile, its property division recorded RM162mil in total unbilled sales as at end-FY21.

Gadang also said the Covid-19 pandemic in Indonesia has not significantly impacted its utility’s division concession water treatment assets, and the operations and maintenance of the water treatment plants are going on uninterrupted.

The group’s hydro power plant in Sumatera, Indonesia has achieved above 90% physical project completion although the current pandemic has impacted the project’s progress, including the commissioning of the plant.