Gadang nearly doubles 1Q earnings on stronger property sales, full commissioning of Indonesian mini hydropower plant

• On its property business, Gadang said the division’s unbilled sales had risen to RM290 million as at 1QFY2024, providing earnings visibility over the next few years.

KUALA LUMPUR (Oct 25): Gadang Holdings Bhd nearly doubled its net profit for the first quarter ended Aug 31, 2023 (1QFY2024) from a year ago, thanks to stronger property sales, coupled with the commencement of commercial operations of its nine-megawatt (MW) mini hydropower plant in Lintau, Indonesia.

Net profit grew to RM6.21 million or 0.85 sen per share for 1QFY2024, from RM3.24 million or 0.45 sen per share for 1QFY2023, while revenue rose 1.6% to RM129.48 million from RM127.42 million, said Gadang in a stock exchange filing on Wednesday.

Apart from full commissioning of the mini hydropower plant in Indonesia, Gadang said the utility business also benefited from favourable foreign exchange translation effect during 1QFY2024.

Going forward, the group said its construction of a 5.9MW alternating current solar photovoltaic energy-generating facility in Tawau, Sabah is in progress, and it will be an additional source of revenue for Gadang from 1QFY2025.

On its property business, Gadang said the division’s unbilled sales had risen to RM290 million as at 1QFY2024, providing earnings visibility over the next few years.

However, the group anticipated that its construction division may have a less favourable outlook and a more competitive tender environment due to the limited availability of projects.

“Moving forward, the [construction] division’s focus will be on the execution and timely completion of its ongoing projects and continual bidding for new projects in order to replenish the group’s order book,” it said.

Gadang updated that its construction division’s outstanding order book stood at RM1.13 billion as at 1QFY2024.

“Given the economic uncertainties, the group remains cautiously optimistic about its growth prospects.

“The group will continue to seek opportunities to expand its revenue and client base, ensure timely completion of all ongoing projects, exercise prudence in business dealings, and manage operational efficiency to achieve long-term sustainable growth,” it said.

Shares in Gadang closed half a sen or 1.6% lower at 31.5 sen on Wednesday, giving the group a market capitalisation of RM229.34 million.

Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!