KUALA LUMPUR (Nov 19): Construction and property developer Gadang Holdings Bhd is targeting to achieve RM75 million in pre-tax profit for financial year ending May 31, 2015 (FY15).

"We expect a better performance in FY15, and hope to have RM75 million in PBT (profit before tax) by then," Gadang's chief financial officer Kok Pei Ling said after the annual general meeting today.

The group's first quarter PBT reached RM12.71 million, or equivalent to almost 17% of the aforesaid target.

She foresees that the main contribution would still be coming from the group's construction business.

On its future prospects, Kok expects the performance for the current financial year to further improve, in tandem with its outstanding construction orderbook of some RM1.3 billion.

According to Gadang's managing director Khew Check Kiet, the group was currently eyeing another RM5 billion contracts and potential projects for its orderbook, mainly focusing on infrastructure implementation.

These contracts includes the Kinrara-Damansara Expressway (KIDEX), Petrochemical Plant within RAPID site, Klang Valley Mass Rapid Transit (KVMRT) Line two (Sungai Buloh-Serdang-Putrajaya), and Maju Expressway Extension to KLIA (E20).

Gadang's construction division orderbook currently amounted to RM1.3 billion, of which involves in projects like MRT (package V2), preparation works for RAPID, and Shah Alam Hospital.

On its property division, Gadang Land Sdn Bhd managing director Ling Hock Hing said unbilled sales stood at RM210 million (excluding joint venture project), which will be recognised gradually in the next two to 2.5 years.

Meanwhile, gross development value (GDV) for new launches in 2015 would be around RM250 million to RM300 million.

Ling predicted that the groups property division shall continue to perform well with a total pipeline gross development value of RM2 billion, comprising on-going developments in Cyberjaya, Bandar Puncak Sena township in Kedah, the remaining phases of The Vyne, and the Capital City joint development project.

Capital City (GDV stands at RM1.8 billion), in Tampoi, could potentially contribute RM5 million of net gain in FY15, according to Ling.

Regarding Gadang's utilities business, project director David Lam revealed that other than the recent acquisition of 70% stake in PT Dewata Bangun Tirta, the concessionaire for 200 lps water treatment and supply in Kabupaten Gresik, Jawa Timur, the group is also interested to expand its involvement in  mini hydro power concession.

"Currently, we are pursuing a four Megawatt mini hydro power concession project in Jawa Barat," he said.

As for Gadang's plantation business, Gadang Plantations Holdings Sdn Bhd director Yue Kham Wah said that he foresee the division will be profitable by 2018 or 2019, when asked to comment on financial results.

Gadang ventured into oil palm business in 2009, with plantation landbank of 5,200 acres (2,600 acres planted area) in Ranau, Sabah.

The group had in late October announced its net profit for the first quarter ended Aug 31, 2014 (1QFY15) surged 34% to RM9.54 million or 4.41 sen per share, from RM7.14 million or 3.63 sen per share in the previous corresponding period, on higher contributions from construction activities.

Revenue in 1QFY15 climbed 18% to RM133.36 million, from RM113.45 million a year ago.

On segmental basis, Gadang's construction division pre-tax profit almost doubled to RM10.32 million from RM5.46 million, on better contract values achieved and higher progress billings from its on-going projects.

The division's revenue also jumped 21% to RM109.06 million, from RM89.85 million.

The group's property division saw a 15% decrease in pre-tax profit to RM3.71 million in 1QFY15, from RM4.35 million on higher marketing costs.

However, revenue for the segment grew 7% to RM20.54 million, from RM19.25 million.

Gadang's utility division pre-tax profit shrink 52% to RM534,000 from RM1.11 million previously, mainly due to disposal of its indirect subsidiary PT Sarana Tirta Rejeki in November last year, as well as weakening Rupiah which is the divisions functional currency.

The group's plantation business saw its pre-tax loss narrowed to RM537,000 from RM629,000, due to extensive harvesting activities.

Revenue wise tripled to RM281,000, from RM85,000 previously.

Gadang share price went as high as RM1.70 this morning, gaining about 5.6% or nine sen, yet subsequently retreated back and settle at RM1.68 by market close, giving it a market capitalisation of RM363.50 million.

The stock has slid from the peak of RM2 in late July.

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