KUALA LUMPUR: Gadang Holdings Bhd’s net profit rose more than three-fold year-on-year to RM5.45 for the third quarter ended Feb 28 (3Q22) from RM1.52mil previously, due to a better profit margin for ongoing projects.

       The group recorded lower revenue of RM119.52mil compared to RM138.91mil in the preceding year's corresponding quarter.

       In the first nine months to Feb 28, Gadang’s net profit surged to RM45.68mil from RM2.93mil while revenue increased to RM513.82mil compared to RM422.42mil last year.

       Gadang, in the notes accompanying its financial results, said its construction division’s outstanding order book currently stood at RM432mil and it is expected to improve with the resumption of construction activities.

       “It is anticipated that this year’s performance will be driven by property sales. Despite the Home Ownership Campaign incentives expiry on Dec 31, 2021, the sales momentum in the year 2022 remained strong.

       “With the launching of two new projects, Cassia Residence @ Cyberjaya and Laman Citra (Phase 1) @ Gelang Patah, with a total gross development value of RM229mil, the unbilled sales have bolstered to RM203mil,” it said.

       The company noted that the recent adverse fluctuation in building material prices had put pressure on construction and property developers.

       “We foresee some reduction in profit margins for the ongoing projects,” it added.

       It’s utility division will continue to pursue investment opportunities to build up its concession asset base with recurring income streams to cushion against the cyclical nature of the construction segment.

       “Barring any unforeseen circumstances, the group remains optimistic about the long-term prospects. It will continue to enhance productivity excellence with cost optimisation to minimise the negative impact on its profitability and liquidity to achieve sustainable growth,” Gadang said.