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Gadang Holdings FY2025: Soaring Revenue, A Dividend Surprise, But What’s Behind the Q4 Loss?
Gadang Holdings Berhad has just released its full-year financial results for the period ending 31 May 2025, and it’s a report with a compelling story. On one hand, the company delivered a spectacular full-year performance, with net profit more than doubling. On the other, the final quarter showed a surprising loss despite a surge in revenue. So, what’s really going on? Let’s dive deep into the numbers to understand the full picture and what it means for the company’s future.
Adding a positive note for shareholders, the Board has proposed a dividend, signalling confidence despite the mixed quarterly results. Let’s break it down.
Core Financial Highlights: A Tale of Two Periods
While the full-year results paint a picture of robust growth, the fourth quarter (Q4) tells a different story. It’s crucial to look at both to get a balanced view of Gadang’s performance.
Quarterly Performance (Q4 FY2025 vs Q4 FY2024)
In the final quarter, Gadang saw a significant revenue increase, but this did not translate to profit. The loss for the quarter widened compared to the same period last year, primarily due to a one-off provision in the Property Division.
Q4 FY2025 Results
Revenue: RM224.86 million
Loss Before Tax: (RM14.57 million)
Net Loss Attributable to Shareholders: (RM11.72 million)
Earnings Per Share (EPS): (1.46 sen)
Q4 FY2024 Results
Revenue: RM150.52 million
Loss Before Tax: (RM5.17 million)
Net Loss Attributable to Shareholders: (RM9.37 million)
Earnings Per Share (EPS): (1.29 sen)
The key reason for the Q4 loss was a provision for additional costs of approximately RM19.0 million related to the mutual termination of a Joint Development Agreement in the Property Division. Without this one-off item, the quarterly performance would have looked much healthier.
Full-Year Performance (FY2025 vs FY2024)
Looking at the full twelve months, the story is overwhelmingly positive. Gadang achieved significant growth across the board, driven by a strong rebound in its Construction Division.
For the full financial year, revenue surged by 38% to RM803.69 million. More impressively, net profit attributable to shareholders skyrocketed by over 100% to RM10.74 million, and Earnings Per Share (EPS) followed suit, growing from 0.65 sen to 1.34 sen.
A Deep Dive into Business Segments
Gadang’s diversified business model includes Construction, Property, and Utilities. Let’s see how each segment performed over the full year.
| Division | FY2025 Revenue (RM’000) | FY2024 Revenue (RM’000) | FY2025 PBT/(LBT) (RM’000) | FY2024 PBT/(LBT) (RM’000) |
|---|---|---|---|---|
| Construction | 467,885 | 277,345 | 6,292 | (22,643) |
| Property | 300,991 | 270,596 | 24,884 | 48,978 |
| Utilities | 34,817 | 35,648 | 5,456 | 4,915 |
Construction Division: The Engine of Growth
The Construction Division was the star performer this year. Revenue jumped by a massive 69% to RM467.89 million. Crucially, it swung from a significant loss last year to a profit before tax of RM6.29 million. This turnaround was attributed to higher work progress on ongoing projects and a reversal of impairment losses from a joint venture project.
Property Division: A Mixed Bag
The Property Division’s revenue grew by a modest 11% to RM300.99 million. However, its profit before tax fell by 49% to RM24.88 million. This decline was primarily due to the aforementioned RM19.0 million provision, lower contributions from completed projects, and the absence of certain interest income recorded in the previous year.
Utilities Division: Stable and Growing
The Utilities Division continues to be a reliable contributor. While revenue saw a marginal 2% dip, profit before tax increased by 11% to RM5.46 million. This was thanks to cost savings at its water treatment plant and favourable foreign exchange movements.
Financial Health and Future Outlook
Gadang’s balance sheet remains solid. Net assets per share stood at RM1.02 as of 31 May 2025. The Group’s operating cash flow was strong at RM64.05 million for the year, indicating healthy cash generation from its core business activities.
Looking ahead, the Group appears cautiously optimistic:
- The Construction Division boasts an outstanding order book of approximately RM839 million, strengthened by a recent award for the Kuala Lumpur-Karak Highway widening project. The focus is on execution and securing new projects in infrastructure and renewable energy.
- The Property Division is supported by total unbilled sales of RM297.2 million from recent launches, which should provide earnings visibility for the upcoming financial year.
- The Utilities Division is set to grow, with a 5.9MWac solar facility in Sabah nearing completion and another 15MWac solar plant successfully bid for. These projects will significantly strengthen recurring revenue streams in the future.
Dividend Delight for Shareholders
In a show of confidence, the Board has proposed a first and final dividend of 0.27 sen per share for the financial year ended 31 May 2025. This proposal is subject to shareholder approval at the upcoming Annual General Meeting.
Summary and Investment Recommendations
Gadang’s FY2025 results present a dual narrative. The full-year figures demonstrate a strong operational turnaround, led by a remarkable recovery in the construction segment. This, combined with a healthy order book, substantial unbilled property sales, and strategic expansion into renewable energy, lays a solid foundation for future growth. However, the Q4 loss, driven by a one-off provision in the property division, serves as a reminder of the inherent risks in development projects. The proposed dividend is a positive signal, reflecting the board’s confidence in the Group’s long-term prospects.
While we do not provide investment advice, investors should consider the following key points and risks:
- Execution Risk: The ability to profitably execute its substantial RM839 million construction order book amidst a volatile cost environment is critical.
- Property Market Sentiment: The performance of the property division is closely tied to the health of the Malaysian property market, which could affect the sales of future launches.
- Future Growth Drivers: The timely and successful commissioning of its new solar projects in Sabah is key to strengthening the Group’s recurring income base.
- Litigation: The Group is facing a material litigation claim of RM9.77 million against its subsidiary, which could have a financial impact if the outcome is unfavourable.
What’s Your Take?
From my perspective, Gadang’s FY2025 report showcases resilience and a strong operational comeback. The management’s focus on replenishing its order book and expanding into the high-growth renewable energy sector appears to be a sound strategy. The key for investors to watch will be the company’s ability to maintain its growth momentum while navigating market challenges and managing project-specific risks.
With a strong order book and new ventures in renewable energy, do you believe Gadang is well-positioned for sustainable growth in FY2026? Share your thoughts in the comments below!
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