Selangor Dredging Berhad’s Latest Financials: A Deep Dive into FY2025 Performance

Greetings, fellow investors! Today, we’re unboxing the latest quarterly report from Selangor Dredging Berhad (SDB), a name synonymous with property development and investment in Malaysia. This report for the fourth quarter ended March 31, 2025, and the full financial year 2025, offers a mixed bag of robust full-year growth contrasted with a challenging final quarter. But fear not, there’s more to the story than meets the eye, including a commendable dividend announcement!

Core Data Highlights: A Tale of Two Periods

Full Financial Year 2025: Strong Revenue Growth, Profit Consolidation

Looking at the full financial year, SDB delivered a remarkable performance on the top line, demonstrating significant expansion in its core businesses. However, net profit saw a slight dip, mainly due to specific factors during the year.

SDB’s revenue surged by an impressive 65.37% to RM375.94 million compared to RM227.46 million in the previous financial year. This robust growth was primarily fueled by strong contributions from key property development projects like the Jia Project in Bukit Serdang and the 19Trees project in Melawati. Profit Before Taxation (PBT) also saw a modest increase of 4.31%, reaching RM29.93 million.

However, the net profit for the full year decreased by 10.39% to RM22.15 million. This was mainly influenced by a lower profit contribution from Fortress Minerals Limited and a higher taxation charge for the period. It’s worth noting that the impact was partially cushioned by a significant gain of RM10.51 million from a capital reduction exercise of a foreign joint venture.

Fourth Quarter 2025: A Challenging Close

The final quarter of the financial year presented a more challenging picture for SDB, with declines across key profitability metrics compared to the same period last year.

Revenue for the fourth quarter decreased by 23.37% to RM52.13 million. More significantly, Profit Before Taxation (PBT) plummeted by 99.20% to a mere RM0.02 million, and net profit fell by 80.57% to RM0.62 million. This substantial decline in quarterly profit was primarily attributed to a share of loss from an associate company, which recognised impairment losses on its non-financial assets.

Segmental Performance: Property Development Leads the Way

As expected, Property Development remained the powerhouse for SDB, contributing the lion’s share of revenue and segment results. The Investment Holding segment also played a crucial role in profit generation, likely reflecting gains from investments.

Conversely, the Hotel Operations and Property Support Services segments recorded losses, indicating ongoing challenges in these areas. This highlights the group’s diversified yet concentrated revenue streams, with property development being the key driver of overall performance.

Financial Health and Cash Flow: A Positive Shift

SDB’s balance sheet shows a slight increase in total assets to RM1.495 billion, while total equity saw a minor decrease. A notable observation is the increase in inventories for property development costs, which rose to RM226.74 million from RM141.87 million. This suggests active investment in future projects, building a pipeline for upcoming revenue.

The cash flow statement presents a particularly positive development. Net cash generated from operating activities turned significantly positive, reaching RM152.91 million for FY2025, a stark contrast to the negative cash flow of RM11.63 million in the previous year. This robust operational cash generation is a healthy sign of the company’s ability to convert its business activities into cash.

The group also made substantial investments, with a net cash outflow of RM149.46 million from investing activities, largely driven by the purchase and addition of land held for development (RM151.42 million). This strategic investment underscores SDB’s long-term growth ambitions in the property sector.

Risk and Prospect Analysis: Navigating the Headwinds

SDB acknowledges the dynamic market environment and outlines its strategies to navigate potential challenges while capitalizing on opportunities:

• Monetary Policy Stability: Bank Negara Malaysia’s decision to maintain the Overnight Policy Rate (OPR) at 3.00% offers a stable interest rate environment, which can be beneficial for the property market by keeping borrowing costs predictable.
• Global Economic Headwinds: The report highlights potential risks from rising global trade tensions and U.S. tariff impositions. These factors could lead to increased construction costs, supply chain disruptions, and shifts in demand within certain property market segments. SDB is aware of these external pressures and is prepared to adapt.
• Strategic Focus: In response to these challenges, SDB is committed to proceeding with its ongoing projects while carefully managing costs and adjusting product offerings to align with current market conditions. The emphasis remains on long-term value creation and continuous assessment of market developments to inform strategic decisions.
• Project Pipeline: Construction of the 19Trees and Jia developments is progressing as planned, with completion anticipated by the end of 2025. Furthermore, sales for the new Senai project have commenced, adding to the group’s future revenue pipeline.
• Unbilled Sales: As of the latest update, SDB holds RM127.33 million in unbilled sales from ongoing projects, providing a visible stream of future revenue.

What are your thoughts on SDB’s latest performance and its future prospects? Do you believe the company can maintain its operational momentum and project delivery in the face of global economic shifts? Share your insights in the comments below!