Lagenda Properties' 1Q profit down on construction segment losses

• The construction segment incurred a loss before tax of RM1.09 million, compared to a profit before tax of RM1.81 million in 1QFY2022.

KUALA LUMPUR (May 23): Lagenda Properties Bhd’s net profit fell 16.32% to RM39.34 million for the first quarter ended March 31, 2023 (1QFY2023), from RM47.01 million a year earlier, mainly due to the near completion of existing projects and a lower recognition from new projects.

Quarterly earnings per share declined to 4.7 sen from 5.63 sen previously, the group's bourse filing showed. 

Revenue dropped 6.12% to RM180.95 million from RM192.75 million.

“Revenue and PATAMI [profit after tax and minority interest] were 6% and 16% lower compared to the previous year's corresponding quarter (1QFY2022) due to the different timing and stages of construction activities directly impacting revenue recognition,” the group said.

The construction segment incurred a loss before tax of RM1.09 million, compared to a profit before tax of RM1.81 million in 1QFY2022, as revenue for the segment shrank to RM115,000 from RM8.45 million.

The lower quarterly net profit was also attributed to higher administrative expenses, which rose 21.65% to RM12.16 million from RM9.99 million a year ago. 

It was also due to a 42.81% increase in finance costs to RM4.78 million from RM3.35 million.

The group said its unbilled sales of RM781.8 million, and bookings of RM433 million as of March 31, 2023 provide a solid pipeline for future sales conversion.

Lagenda Properties managing director Jimmy Doh said the group anticipates a surge in momentum as it plans to launch over 7,000 homes across Perak, Kedah and Johor this year, compared with 4,800 homes in 2022.

"With our proven track record and take-up rates so far, we are confident that the new launches will be well-received by the market. From a sales perspective, we have seen momentum increase steadily from January to March, and we anticipate this trend to continue as the year progresses with the roll-out of new launches," said Doh in a statement.