SunCon's 4Q net profit falls nearly 30% y-o-y on lower contribution from construction segment

• Revenue for the construction segment rose 22.9% y-o-y to RM2 billion in FY2022 on the back of contribution from projects in India and normalisation of economic activities in the current financial year.
• In the preceding financial year, various phases of lockdowns had affected productivity of construction activities. 

KUALA LUMPUR (Feb 21): Sunway Construction Group Bhd's (SunCon) net profit for the fourth quarter ended Dec 31, 2022 (4QFY2022) declined 29.48% year-on-year (y-o-y) to RM45.65 million from RM64.73 million, dragged mainly by lower contribution from construction segment.

Earnings per share during the quarter decreased to 3.54 sen from 5.01 sen in the corresponding quarter a year ago, the construction firm's filing on Tuesday (Feb 21) showed.

Revenue for the quarter also fell 19.66% to RM503.43 million from RM626.61 million in the previous year.

The group also declared a second interim single-tier dividend of 2.5 sen per share, payable on April 6.

This brings total dividend for the full year ended Dec 31, 2022 (FY2022) to 5.5 sen, compared with 5.25 sen for FY2021.  

Nonetheless, SunCon's FY2022 net profit increased 20.07% y-o-y to RM135.18 million from RM112.59 million, while revenue rose 24.64% to RM2.16 billion from RM1.73 billion.

The encouraging set of financial performance in FY2022 was underpinned by better performance from all segments.

Revenue for the construction segment rose 22.9% y-o-y to RM2 billion in FY2022 on the back of contribution from projects in India and normalisation of economic activities in the current financial year. In the preceding financial year, various phases of lockdowns had affected productivity of construction activities. 

Correspondingly, profit after tax (PBT) for the construction segment increased 16.6% y-o-y to RM173.4 million.

The precast segment recorded revenue of RM181.6 million for FY2022, from RM122.9 million in the previous financial year. Its PBT more than doubled to RM10.7 million in FY2022, from RM3.4 million previously.

It said financial performance for the precast segment was adversely affected in 2021 due to lockdowns in Malaysia, circuit breaker in Singapore and a short period of total closure of both precast plants in Johor in the third quarter of FY2021.

Commenting on SunCon's FY2022 performance, group managing director Liew Kok Wing said the group is pleased to deliver a set of stellar financial results, with “a record PBT [of RM184.06 million] in FY2022”.

Notwithstanding that, the group also surpassed its FY2022 new order book target to end the year at RM2.6 billion, compared to the target of RM2 billion, said Liew in a separate statement.  

“We continue to make good progress in our regionalisation and new business expansion efforts. The group has recently secured our maiden hyperscale data centre project valued at approximately RM1.7 billion in Sedenak Tech Park, Johor,” he added.

On prospects, Liew said that after recording a robust economic growth in 2022, Malaysia’s economic growth is expected to moderate in 2023.

“Barring any unforeseen circumstances including potential escalation in building materials prices, the group is cautiously optimistic of registering a positive growth in FY2023 supported by our strong existing outstanding order book,” he added.

Shares of SunCon settled three sen or 1.85% higher at RM1.65, giving the group a market capitalisation of RM2.13 billion.