KUALA LUMPUR (July 26): Gadang Holdings Bhd posted a 21.72% drop in net profit to RM23.27 million in the fourth quarter ended May 31, 2018 from RM29.73 million a year ago, on poorer construction earnings, mitigated by stronger property profits.

However, revenue increased 4.09% to RM182.01 million, from RM174.85 million a year ago, on continuing progress of its construction projects, including those related to the refinery and petrochemical integrated development project (RAPID) in Pengerang, Johor, second line of the Klang Valley mass rapid transit, Tun Razak Exchange, and Cyberjaya Hospital.

For the full year ended May 31, 2018, Gadang said its net profit dropped 4.99% to RM95.12 million from RM100.12 million a year ago, amid higher revenue of RM594.29 million against RM553.87 million previously.

"The board has proposed a first and final dividend of three sen per share in respect of the financial year 2018 for approval of the shareholders at the forthcoming annual general meeting," Gadang said in a bourse filing.

On a segmental basis, Gadang said contribution from the construction division slumped by 54% to RM16.76 million in the fourth quarter from RM36.05 million a year ago, while the utilities division slipped into the red after reporting an operating loss, owing to foreign exchange losses and pre-operating expenses related to the mini-hydro power project.

However, the property segment delivered a 102.26% increase in earnings contribution to RM26.89 million from RM13.29 million a year ago, thanks to the higher profit chalked by the Capital City integrated complex development in Johor Bahru.

Looking ahead, Gadang said its construction orderbook of RM1.51 billion is expected to provide good income visibility and stable earnings stream in FY19.

As for the property division, Gadang said it will initiate more aggressive marketing programmes given the overall weakness, which has impacted sales.

"With unbilled sales of some RM100.80 million, and planned new launches, the property division is expected to maintain a satisfactory performance in the coming financial year," it added.

In addition, Gadang said the successful implementation of the mini-hydro power plants in Indonesia by early 2019 will add a new recurring income stream.

Gadang gained 0.5 sen or 0.63% to close at 80 sen yesterday, for a market capitalisation of RM529.38 million. — theedgemarkets.com

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