Cahya Mata posts stronger 1Q earnings as BCCK2 contract drives property development turnaround

PETALING JAYA (May 26): Cahya Mata Sarawak Bhd posted higher revenue and profit before tax for its first quarter ended March 31, driven by stronger infrastructure activity in Sarawak, which boosted its cement and construction materials businesses, alongside higher property development contributions supported by construction progress on the RM550 million Borneo Convention Centre Kuching 2 (BCCK2) contract.

Group revenue rose 13.1% to RM278.5 million from RM246.1 million a year earlier, while profit before tax (PBT) increased 27.2% to RM34.2 million from RM26.9 million, according to the group's Bursa Malaysia filing yesterday. 

Net profit attributable to shareholders, however, declined 5.0% to RM24.1 million from RM25.3 million previously, primarily due to a one-off RM7.3 million tax credit adjustment recognised in the corresponding quarter last year.

Property development turns profitable on BCCK2 and Cahya Intan

The property development division delivered the quarter's most pronounced year-on-year improvement, with revenue surging 341% to RM37.3 million from RM8.5 million and segment PBT swinging to RM4.7 million from a loss before tax of RM1.3 million a year earlier. 

The group attributed the turnaround to revenue recognition from BCCK2, alongside construction progress at Cahya Intan Phase 2 and sales of completed properties.

BCCK2, a Sarawak government strategic initiative focusing on boosting large-scale international conventions and exhibitions, is progressing according to schedule with completion anticipated by March 2028.

Cement and construction materials sustain infrastructure-led momentum

The cement division recorded revenue of RM161.1 million and PBT of RM41.0 million for the quarter, up 12.5% and 11% respectively, driven by higher sales volume, a strategic price revision, and lower production costs. 

The construction materials and trading division recorded revenue of RM34.6 million, up 192.5% from RM11.8 million a year earlier, attributable to increased trading activity.

Road maintenance steady; oiltools weighs on group result

The road maintenance division recorded marginally lower revenue of RM41.3 million against RM42.6 million a year earlier, due to lower work completions achieved for Instructed Works, though PBT held broadly stable at RM7.1 million versus RM7.0 million previously.

The oiltools division was the principal drag on group performance, with revenue declining 45.7% to RM23.5 million from RM43.3 million, and the segment recording a loss before tax of RM1.2 million against PBT of RM4.2 million a year earlier. The group attributed this to contract completions and reduced rig activity across most of its operating markets.

Balance sheet and financial position

The group maintained a net cash position as at March 31, with total cash and bank balances of RM585.5 million exceeding total borrowings of RM224.1 million, and a gearing ratio of 0.08 times. Net assets per share edged up to RM3.19 from RM3.16 at end-December 2025. No dividend was declared for the quarter.

Outlook: Cost pressures monitored; key projects on track

The group said it is actively monitoring cost pressures arising from the Middle East conflict, which has driven increases in raw materials, logistics and diesel costs, and may have an impact on economic activity. The group said it is implementing mitigation measures where possible to manage these pressures and protect margins.

Key milestones disclosed for the remainder of 2026 include the ongoing construction of Mambong Clinker Line 2 within the cement division, targeted for commercial rollout in 2027, and the phosphates division's commercialisation of yellow phosphorus, expected to commence in September following the successful commissioning of the first and second furnaces in January and April respectively.

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