Varia returns to black in 4Q as FY2026 net profit rises to RM46.5m

PETALING JAYA (Aug 27): Varia Bhd returned to profitability in the fourth quarter ended June 30, 2026 (4QFY2026), while full-year net profit attributable to shareholders surged to RM46.50 million on higher construction activity.

In a Bursa Malaysia filing on Thursday (Aug 27), the group said net profit attributable to shareholders stood at RM6.51 million for 4QFY2026, compared with a net loss of RM3.65 million in the corresponding quarter a year earlier, according to its unaudited results.

Quarterly revenue rose 62% to RM274.69 million from RM169.75 million, while profit before tax increased to RM12.28 million from RM470,000.

Varia said its construction segment remained its key contributor, recording revenue of RM271.27 million and profit before tax of RM21.19 million during the quarter.

Revenue was mainly derived from the RTB Segamat project, Pasar Cheras, RTB Kota Tinggi, Puspahanas, STP Mak Mandin, Pulau Indah, Universiti Pendidikan Sultan Idris, UDA and Perkeso Setiu projects.

The property development segment recorded RM3.39 million in revenue and a loss before tax of RM848,000, as revenue remained relatively low following the completion of single-storey units at Taman Arowana.

Sales and development of 72 double-storey units at Taman Arowana are ongoing, while another 70 units have yet to be developed and launched. Its Jalan Tun Razak project remains at the initial stage of development.

Varia also said it had expanded its development portfolio with projects in Presint 7, Putrajaya, and Bandar Seri Alam, Johor Bahru.

On a quarter-on-quarter basis, revenue declined 6% from RM291.38 million in 3QFY2026, while profit before tax fell 43% from RM21.65 million. Profit after tax dropped 51% to RM6.45 million from RM13.06 million.

Varia attributed the weaker sequential performance mainly to the reversal of accruals recognised for the Perkeso Ipoh project, where variation orders remain pending client approval.

It also cited higher administrative and operating expenses arising from its employees' share option scheme, as well as higher finance costs from the utilisation of banking facilities to support the expansion and progress of ongoing projects.

Full-year performance

For FY2026, net profit attributable to shareholders rose to RM46.50 million from RM2.01 million in FY2025, as revenue climbed 77% to RM968.25 million from RM546.77 million. Profit before tax increased to RM72.02 million from RM6.11 million.

The construction segment contributed RM953.55 million in revenue and RM111.72 million in profit before tax for the year.

Its construction subsidiary Pembinaan Teguh Maju Sdn Bhd achieved and exceeded its cumulative three-year profit guarantee for FY2024 to FY2026, recording total profit after tax of RM132.28 million against the guaranteed RM120 million.

RM2.9b order book

As at June 30, Varia's outstanding order book stood at approximately RM2.90 billion, comprising projects across infrastructure, education, rehabilitation institutions and environmental initiatives. Most of the ongoing projects are expected to be completed progressively by 2029.

The group said construction is expected to remain its key growth and earnings contributor. It plans to pursue infrastructure opportunities, particularly highways and sewerage treatment plants, while exploring opportunities in data centres, power plants and other energy-related projects.

Operating cash flow at negative RM104.9m

The group recorded net cash used in operating activities of RM104.89 million for FY2026, compared with RM1.09 million a year earlier. Its cash-flow statement showed net changes in current assets of RM497.84 million, partly offset by RM310.36 million in net changes in current liabilities.

Trade receivables rose to RM380.11 million as at June 30 from RM144.76 million at the preceding financial year end, while contract assets increased to RM157.43 million from RM57.39 million.

Total borrowings stood at RM260.05 million as at June 30, compared with RM131.99 million a year earlier.

No dividend was proposed or declared for FY2026.

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