KUALA LUMPUR (July 24): Gadang Holdings incurred a quarterly net loss of RM3.39 million for the fourth quarter ended May 31, 2019 (4QFY19), versus a net profit of RM23.31 million a year ago, due to recognition of variation orders at its construction division, and significantly lower profit from its Capital City project in Johor.

This is the first quarterly loss the group has recorded since 4QFY11, when Gadang posted a net loss of RM9.36 million.

The group’s loss per share for 4QFY19 was 0.51 sen, versus an earnings per share of 3.54 sen in 4QFY18.

Nonetheless, Gadang’s filing with Bursa Malaysia shows revenue grew 7% to RM196.9 million, from RM183.51 million in 4QFY18.

For the entire FY19, the group’s net profit dropped 55% to RM43.49 million, from RM96.38 million in FY18, despite revenue growing 18% to RM699.89 million, from RM594.77 million.

Moving forward, Gadang said it is cautiously optimistic that major construction initiatives such as the revival of the East Coast Rail Line project and the development of Bandar Malaysia infrastructure components, will be positive for the group.

The group said its construction division’s existing outstanding order book stands at RM1.24 billion, which will be able to sustain its operation for the next two years.

Gadang also said the overall weak property market is expected to delay new launches of property development projects in the near term.

“For the forthcoming FY20, the property division, supported by total unbilled sales of RM119.34 million, remains optimistic about the marketing opportunities ahead. We will focus on strengthening branding activities across all marketing platforms, to cater to wider customer segments,” it said.

In the utility sector, Gadang said it will continue to make steady recurring income.

“The construction of 9MW mini-hydro power plant in Lintau, Sumatera, which is expected to be completed in the coming financial year, will contribute further recurring income to the utility division,” it said.

Gadang’s share price closed unchanged at 91 sen today, giving it a market capitalisation of RM662.54 million.