MGB Berhad, a subsidiary of construction and property development solutions provider LBS Bina Group Berhad, registered RM177.76mil in revenue with RM12.24mil profit after tax in its Q1 results for the financial year ending Dec 31, 2023 – as compared to RM6.81mil in the preceding year’s corresponding quarter.
The strong results were mainly attributable to the steady contribution from several sizeable projects such as Residensi Bintang and Mercu Jalil at Bukit Jalil as well as Ritma Perdana and Melodi Perdana at Alam Perdana whereby the projects are targeted to be completed by FYE2023.
Also, MGB successfully closed and finalised accounts for completed projects previously with major subcontractors at a further competitive price which then improved the overall project cost and added to its earnings.
The construction and trading business segment remained as MGB’s key revenue stream which contributed revenue of RM168.64mil.
Profit before tax for the current financial period was RM13.4mil – as compared to RM10.91mil in the preceding year’s corresponding quarter.
Leveraging on its in-house industrialised building system (IBS) precast production enabled MGB to reduce reliance on labour, which is now scarce and at high cost; as such MGB was able to continue to report better margin.
“It is worth highlighting that our manufacturing of precast concrete products business has performed well with an internal revenue of approximately RM14.26mil for this quarter and having five projects on-hand to complete,” MGB said in a statement.
The improved performance is also attributed to the property development segment.
The newly-launched Idaman Melur in Cybersouth offering 1,448 units, as well as rapid progression of the third and fourth phases of Laman Bayu in Batu Pahat are the catalysts for the segment’s good showing, which contributed revenue of RM9.12mil – as compared to RM4.58mil in the preceding year’s corresponding quarter.
The segment’s profit before tax for the current quarter was recorded at RM3.06mil – as compared to RM670,000 in the preceding year’s corresponding quarter.
“We are delighted to kick-start 2023 on the right footing. This is the strongest quarter performance for MGB since the company’s establishment,” says MGB executive vice chairman Tan Sri Ir Lim Hock San.
“With 20 on-going projects in our construction and property development segments, we are on steady ground as MGB’s top line seeks to generate revenue of approximately RM4bil in the coming years.
“This is on the back of our outstanding construction order book which stands at a healthy RM1.78bil and an estimated gross development value of RM2.36bil under our property development segment.
“Looking ahead, we will focus on the execution of our projects to deliver on time and in a cost-efficient manner while maintaining its quality.
“The response to our Rumah Idaman MBI projects has been very encouraging and we are eager to launch the remainder of the projects in the upcoming months.
“Notwithstanding that, we expect a healthy replenishment of construction projects to keep us busy and will continue our momentum in securing more Rumah Idaman MBI development projects through collaboration with Menteri Besar Selangor (Incorporated).
“We are cautiously optimistic of our performance for the remainder of 2023 as we are wary of the effect of external factors, such as interest rate hikes.
“However, it may not significantly impact our financial performance because of our low net gearing ratio of 0.11.
“We are confident in our ability to mitigate any adverse impact which may arise from potential external factors and continue to deliver sustainable growth in the coming years to our shareholders,” says Lim.