PETALING JAYA: Sunway Construction Group Bhd
(SunCon) is cautiously optimistic over the recently unveiled Budget 2025, noting that while the budget did not introduce new major infrastructure projects, it underscores the government’s commitment to the completion of existing initiatives.
The group said this includes ensuring the continuity of key developments such as the Penang Light Rail Transit project, Penang International Airport Expansion project and the Johor Bahru–Singapore Rapid Transit System Link.
The group believes that these jobs are expected to sustain momentum within the construction sector.
“However, potential challenges loom with the proposed reforms, including the increase in the minimum wage, Employees Provident Fund contribution to foreign workers, the implementation of a multi-tiered foreign worker levy and subsidy rationalisation measures.
“These changes could result in higher operational costs and impact earnings,” it said.
Releasing its results for the third quarter ended Sept 30 (3Q24) yesterday, SunCon saw net profit climb 32.7% year-on-year (y-o-y) to RM46.5mil, as revenue also grew 28.5% to RM865.3mil.
Cumulatively for the first nine months of 2024, the group posted a net earnings of RM117.7mil, representing a 22.8% y-o-y gain from the corresponding period from a year earlier, as turnover rose 17.9% to RM2.1bil.
In a filing with Bursa Malaysia, SunCon attributed the improved profit and revenue to the accelerated progress in data centre projects for its construction segment.
Meanwhile, it observed lower turnover and profit for its precast business for 3Q24, noting that the higher turnover in the corresponding quarter last year was primarily driven by higher contributions from the projects nearing completion.
“The turnover is lower for the precast segment in the current financial year due to a staggered delivery schedule for newly secured projects.
“However, profit margin in the current financial year is higher due to the reversal of material cost provisions for completed projects during this period,” it added.
Moreover, the reversal of impairment in 3Q24 further enhanced its profit margin for the quarter.
Compared to the preceding quarter ended June 30, net profit was also up 19.6% from RM38.9mil, as revenue also increased 32.9% from RM651.2mil.
SunCon said accelerated progress in data centre and other newer projects had led to its improved quarterly profitability.
The group declared a dividend of 2.5 sen per share for 3Q24, bringing the total dividend proposed for the year to six sen per share. The cumulative dividend is double what it had declared for the same period of 2023.
SunCon reiterated its commitment to navigating potential challenges through strategic planning and cost management.
“Apart from opportunities in both the private and public sectors, we continue to pursue in-house pipeline projects from our immediate holding company, Sunway Bhd, particularly those involving special purpose buildings,” it said.
