PETALING JAYA: MGB Bhd’s earnings for the financial year 2023 (FY23) is expected to triple, underpinned by better labour conditions and higher progress billings of certain projects.

       RHB Research said MGB, the construction and property development solutions provider and subsidiary of LBS Bina Group Bhd, saw core earnings for the nine months of FY23 increase more than 100% year-on-year to RM36mil.

       “This exceeded estimates at 82% of full-year projections. The positive deviation was due to the better-than-expected performance of the property division.

       “We expect MGB’s FY23 earnings to triple, backed by better labour conditions and higher progress billings of certain projects, particularly KITA@Cybersouth and Rumah Selangorku Idaman (RSI)-related projects,” the research house said in a report yesterday.

       For the third quarter of FY23 (3Q23), MGB posted a core profit of RM12.4mil from RM4.1mil in 3Q22.

       RHB Research said this was supported by robust construction revenue, mainly from projects like the Idaman BSP, Kita Mekar, Prestige and Kita Mesra.

       The pre-tax profit margin for the group’s construction segment in 3Q23 stood at 6.2%, compared with 3.6% in 3Q22.

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       “During this period, the property development arm saw a more than 100% jump in revenue during 3Q23, backed by sales at Idaman Melur (50% sold), Idaman Cahaya (58% sold) and Idaman Sari (73% sold).

       “As such, pre-tax profit margins of the property arm grew in tandem – reaching 14.6%, from 4.1% in 3Q22,” the research house said.

       As of the end of 3Q23, MGB’s outstanding order book is at RM1.9bil, providing earnings visibility of up to three years.

       The group’s outstanding order book of RM1.9bil includes five jobs related to LBS Bina’s key township development, KITA@Cybersouth. The five jobs have a cumulative contract value of about RM760mil.

       “As such, MGB continues to be seen as a frontrunner for LBS’ upcoming projects under the KITA@Cybersouth banner.

       “Its five projects for KITA@Cybersouth make up RM382mil or 20% of MGB’s outstanding construction order book,” the research house said.