LSH Capital posts lower 2Q earnings on higher tax expenses, softer property contributions

KUALA LUMPUR (May 23): Lim Seong Hai Capital Bhd posted a 13.8% decline in second-quarter net profit, weighed by higher tax expenses and softer contributions from its property development segment as its flagship LSH Segar project nears completion.

Net profit for the quarter ended March 31, 2026 (2QFY2026) fell to RM18.6 million from RM21.58 million a year earlier, while revenue slipped 6.7% to RM99.45 million from RM106.6 million, the construction and infrastructure group's bourse filing showed.

Tax charges for the quarter jumped to RM10.64 million compared with RM5.45 million a year ago. The group said the higher effective tax charge stemmed from differing profit recognition within the group structure. A larger share of construction activities was undertaken at subsidiary level, resulting in higher taxable profits and tax expenses, while the corresponding revenue and profits were eliminated upon consolidation at the group level.

Meanwhile, lower revenue recognition from the property development segment was mainly attributed to the LSH Segar project, which is nearing completion with construction progress reaching about 99%.

Despite the softer property contribution, the group said its construction and facilities management segments delivered stronger performances during the quarter.

LSH Capital declared an interim dividend of 0.75 sen per share, slightly lower than the 0.78 sen a year ago. However, cumulative dividends declared year-to-date rose to 1.78 sen from 1.45 sen previously. The entitlement date is June 11, with payment scheduled for June 24.

The group said it continues to expand its project pipeline, including the recently added LSH Bund development in Jalan Pahang with a gross development value (GDV) of RM500 million, a mixed development project in Mukim Setapak, Selangor with a GDV of RM403.9 million, as well as the Jalan FR03 upgrading works in Kuantan in collaboration with Knusford Construction Sdn Bhd.

Separately, the group said it recently secured a RM197.9 million letter of offer from Perbadanan Aset Keretapi for land in Petaling district, Selangor.

LSH Capital said these initiatives are expected to strengthen earnings visibility and support its medium- to long-term growth trajectory.

As at end-March 31, the group’s outstanding construction and engineering order book stood at RM1.24 billion, providing revenue visibility through financial year ending Sept 30, 2029. Its property development pipeline, with a total estimated GDV of RM1.68 billion, is also expected to support earnings visibility until 2029.

Chairman Tan Sri Datuk Seri Lim Keng Cheng said the group remains well-positioned for sustainable growth, backed by its healthy order book, expanding GDV pipeline and growing recurring income streams.

Looking ahead, LSH Capital said it will continue actively tendering for infrastructure, building and concession projects, while selectively pursuing strategic landbank opportunities within the Klang Valley and other growth corridors.

Shares in Lim Seong Hai Capital Bhd closed unchanged at RM1.79 on Friday, giving the group a market capitalisation of RM1.5 billion. The stock has surged about 120% over the past year.

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