Gadang's 3Q improves on better property contribution, lower cost of sales

KUALA LUMPUR (April 20): Gadang Holdings Bhd posted a slight increase of 3% in net profit for the third quarter ended Feb 28, 2017 (3QFY17) to RM25.79 million, from RM25.11 million a year earlier, largely on higher contributions from the property division.
 
It also registered a 41% fall in cost of sales to RM77.92 million during the quarter, from RM131.8 million in the previous corresponding quarter, its Bursa Malaysia filing yesterday showed.
 
However, the positive impact of these were mostly negated by the 27% fall in revenue to RM128.54 million, from RM17.92 million a year ago, on lower contribution from its construction division, which registered a topline of RM70.77 million, compared with RM122.73 million previously.
 
For the first nine-months of FY17, net profit grew 11% to RM70.39 million, from RM63.69 million — thanks to improved contributions from its property and utility divisions, though revenue fell 11% to RM381.02 million, from RM427.28 million, again dragged by its construction division.
 
Moving forward, the company said as the current financial year remains challenging with higher operating cost, the board is reviewing the operational efficiency of each business unit.
 
“Accordingly, the board may consider divesting the non-core business activities to realign the group’s competitive position as an integrated engineering group, moving forward,” said Gadang Holdings.
 
“However, the board is encouraged that based on the present level of activities, the group’s performance for this financial year will be another strong year,” the company added.
 
Shares in Gadang Holdings closed down two sen or 1.55% at RM1.27 yesterday, for a market capitalisation of RM828.97 million. — theedgemarkets.com

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