Lower Q4 earnings for Gadang

Less revenue and higher tax expenses contribute to the drop

PETALING JAYA: Lower revenue and higher tax expenses have led construction outfit Gadang Holdings Bhd to post a slightly lower earnings for its final quarter of financial year 2017 ended May 31, at approximately RM29.99mil.

In a filing with Bursa Malaysia, the company announced that its net profit for the fourth quarter fell by 3.5% year-on-year (y-o-y), compared to the RM31.07mil made a year earlier.

The Main Market-listed Gadang also registered a lower top line in the quarter in review after its overall revenue dropped significantly by 33.82% y-o-y to RM163.78mil. This was due to lower revenue contribution from its construction division, which fell by nearly 50% y-o-y to RM89.95mil in the quarter.

As for the group’s full-year financial performance, the net profit was up by 5.92% y-o-y to RM100.38mil, despite the reduction in its turnover.

To note, Gadang’s top line in financial year 2017 fell by 19.41% y-o-y to RM542.8mil, on the back of lower revenue from its construction segment.

Moving forward, the company remains cautious on the prospects of its business operations, in tandem with the expected challenging business environment.

“The board expects the new financial year of 2018 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,” said the company in its filing to the stock exchange.

Gadang announced a 3 sen-dividend for the fourth quarter, compared to a dividend of 7 sen in the corresponding quarter of preceding year. Earnings per share was 4.63 sen.

At the close of trading yesterday, Gadang’s shares closed 2 sen or 1.54% lower at RM1.28, with 691,000 shares done.