Gagasan Nadi Cergas reports 1Q19 net profit of RM6.2 million

  • Order book of RM712 million as of 31 March 2019, to sustain Group’s revenue over the next three years

Selangor, Malaysia, 29 May 2019 – Construction group and concessionaire Gagasan Nadi Cergas Berhad (Gagasan Nadi Cergas, the Group, 佳搏有限公司, Bloomberg: 0206:MK, Reuters: GAGA.KL) charted RM6.2 million net profit on RM68.9 million revenue in the first quarter ended 31 March 1Q19 (1Q19).

Gagasan Nadi Cergas’ net profit was 34.8% higher than RM4.6 million reported in the preceding quarter ended 31 December 2018 (4Q18), despite 22.7% lower revenue from RM89.2 million in 4Q18.

The higher net profit quarter-on-quarter was mainly driven by lower IPO listing expenses incurred in 1Q19 and impairment loss of receivables in 4Q18.

The Group’s unbilled order book stands at approximately RM705 million as of 31 March 2019, which provides earnings visibility until financial year ending 31 December 2021. The Group’s on-going projects are Rumah Selangorku in Putra Heights and Bukit Raja, 1Malaysia People’s Housing (PR1MA) in Pasir Mas, Cardiology Centre for Hospital Serdang, Maktab Rendah Sains Mara (MRSM) in Bagan Datuk and recently-secured public residential development from Putrajaya Homes.

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Haji Wan Azman bin Wan Kamal, Group Managing Director of Gagasan Nadi Cergas Berhad said:

We are optimistic of our future prospects, as the construction sector is witnessing the returning uptick of tender activity for essential buildings and affordable housing.

This is supported by the Government’s renewed stance to undertake more infrastructure buildings projects such as tertiary education, hospitals and government buildings. Meanwhile, the affordable housing agenda remains one of the top priorities for both federal and state Government, in line with the RM1.5 billion Budget 2019 allocation.

Mindful of this, we intend to capture these tremendous opportunities by leveraging on our two-decade track record of delivering vast array of buildings nationwide.

For 1Q19, the construction segment contributed RM61.6 million or 89.3% of the Group’s topline. The construction segment also constituted 56.9% or RM5.5 million of the Group’s profit before tax (PBT).

The Group’s recurring income streams via concession & facility management, and utility services brought in a further RM5.1 million or 7.4% of 1Q19 turnover. The recurring income segment, nonetheless, led 1Q19 PBT contribution with RM6.1 million or 62.2% of Group’s PBT.

Meanwhile, property development contributed RM2.3 million or 3.3% of 1Q19 revenue and RM104K or 1.1% of 1Q19 PBT.

No comparative figures for the preceding year’s quarter are available as this is the first interim financial report on the consolidated results for the 1Q19 announced by the Company in compliance with the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities).

Gagasan Nadi Cergas Berhad was listed on the ACE Market of Bursa Securities on 8 January 2019.

Mutual agreement in relation revision of contract sum for the Cardiology Centre for Serdang Hospital Project

On 24 May 2019, Gagasan Nadi Cergas mutually agreed with Public Works Department Malaysia to amend the total contract sum for the Cardiology Centre for Serdang Hospital Project from RM289.8 million to RM284.0 million, representing a reduction of approximately 2% of the original contract value. This comes after a request from Public Works Department Malaysia for a 10% contract sum reduction in November 2018, which was disclosed in the IPO Prospectus.

Commenting on this, Haji Wan said:

“The contract sum reduction of only 2% from the initial 10% request is a positive outcome for the Group, as we are now able to fully focus in delivering essential buildings that are needed for Malaysia. Going forward, the project is expected to contribute positively to Group’s future earnings.”