Gadang’s net profit dips in Q4

PETALING JAYA: Gadang Holdings Bhd, which has sold its plantation business, saw a slight dip in fourth quarter ended May 31, 2017 net profit on a RM1.7 million loss from discontinued operations.

The group made a net profit of RM30 million for the quarter, compared with RM31.1 million for the same quarter in the preceding year.

Profit before tax for the quarter however was 17% higher at RM45 million on improved profit margins from construction projects and higher contributions from property activities.

This was on a 33.8% drop in revenue to RM163.8 million, from RM247.5 million. The board of Gadang has proposed a first and final dividend of three sen per share for the financial year.

Gadang expects the new financial year 2017/18 to remain challenging with market conditions becoming more complex and intense due to rapid cost escalation impacted by inflationary pressure.

“Accordingly, the board initiated a strategic review to realign the group’s business activities to remain competitive and stay growth driven. Arising from the strategic assessment, the board approved the disposal of the plantation business and to consolidate its resources to further strengthen the construction and property activities,” its board told Bursa Malaysia in a filing.

It said the construction division with its RM1.5 billion order book; property division with RM136.2 million unbilled sales and the mini hydro project of 9MW in Indonesia from its utility division will support its profitability in the future. The mini hydro project is expected to be revenue generating by the fourth quarter of the current financial year.

For the full 12 month period however, the group managed a 5.9% jump in net profit to RM100.376 million, from RM94.8 million.

This was despite revenue falling 19% to RM542.8 million from RM673.5 million for for the financial year ended May 31, 2016.