As the first quarter of 2025 concludes, Kumpulan Kitacon Berhad, a prominent player in Malaysia’s construction sector, has released its latest financial report. This report offers Malaysian retail investors a crucial look into the company’s performance, strategic direction, and the economic landscape it navigates. While the company reported a slight dip in revenue for the quarter, it impressively achieved a significant surge in profitability and maintained a robust financial position, alongside announcing a dividend for the previous financial year. Let’s dive into the details to understand what’s driving Kitacon’s journey.
Financial Performance: A Closer Look at Q1 FY2025
Kumpulan Kitacon Berhad’s first quarter results for the period ended 31 March 2025 present a mixed yet promising picture. While revenue saw a slight decline, the company demonstrated impressive profit growth, highlighting strong operational efficiency and improved margins.
Revenue Performance
The Group’s revenue for the current financial quarter stood at RM210.9 million, a decrease of approximately RM14.2 million or 6.3% compared to RM225.2 million in the same quarter last year. This reduction is primarily attributed to a lower level of construction activities as projects reach completion.
Q1 FY2025 Revenue
RM210,945,000
Q1 FY2024 Revenue
RM225,170,000
Profitability Soars
Despite the revenue dip, Kumpulan Kitacon Berhad significantly boosted its profitability. Profit Before Taxation (PBT) for the quarter increased by approximately RM3.1 million or 19.8% to RM18.5 million, up from RM15.4 million in the same quarter last year. This impressive jump is primarily due to improved margins achieved during the period.
Q1 FY2025 Profit Before Taxation
RM18,491,000
Q1 FY2024 Profit Before Taxation
RM15,434,000
The positive trend continued down to the net profit. Profit for the financial period (Net Profit) rose by approximately RM2.4 million or 21.2% to RM13.8 million from RM11.3 million in the corresponding quarter last year. Consequently, Basic Earnings Per Share (EPS) also saw a healthy increase to 2.75 sen, compared to 2.27 sen in the same period last year, reflecting the enhanced profitability on a per-share basis.
Q1 FY2025 Net Profit
RM13,757,000
Q1 FY2024 Net Profit
RM11,349,000
Q1 FY2025 Basic EPS
2.75 sen
Q1 FY2024 Basic EPS
2.27 sen
Revenue Breakdown by Segment
A closer look at the revenue segments reveals interesting shifts:
| Segment | Q1 FY2025 (RM’000) | Q1 FY2024 (RM’000) | Change (RM’000) | Change (%) |
|---|---|---|---|---|
| Residential | 175,305 | 155,495 | +19,810 | +12.7 |
| Non-residential (Commercial) | 25,903 | 30,684 | -4,781 | -15.6 |
| Non-residential (Industrial) | 8,996 | 38,991 | -29,995 | -76.9 |
| Non-residential (Others) | 657 | – | +657 | N/A |
| Other related services | 35,556 | 84 | +35,472 | +42228.6 |
| Total Revenue | 210,945 | 225,170 | -14,225 | -6.3 |
The robust growth in the residential segment and “Other related services” partially offset the significant decline in industrial non-residential projects, leading to the overall revenue reduction.
Financial Health and Cash Flow
Beyond the income statement, Kumpulan Kitacon Berhad’s balance sheet reflects a stable and improving financial position. As at 31 March 2025, Total Assets increased to RM683.3 million from RM676.7 million at the end of December 2024. This growth was mirrored in Total Equity, which rose to RM345.3 million from RM334.8 million, contributing to an improved Net Assets Per Share of RM0.69 (up from RM0.67).
However, the cash flow statement tells a slightly different story for the quarter. Net cash from operating activities decreased to RM8.2 million compared to RM12.0 million in the same quarter last year. This was largely influenced by changes in working capital, particularly receivables and payables. Net cash used in investing activities saw a slight improvement, moving from RM18.7 million last year to RM17.1 million this quarter, partly due to proceeds from the disposal of unit trusts. Net cash from financing activities also saw a decrease, mainly due to dividend payments made during the quarter.
Future Outlook and Navigating Challenges
Kumpulan Kitacon Berhad remains cautiously optimistic about its prospects for the current financial year, a sentiment underpinned by a strong order book. The company has secured new contracts worth RM259.7 million from 1 January 2025 to 20 May 2025, boosting its outstanding order book to a healthy RM1.22 billion. This substantial order book provides a solid foundation for future revenue generation.
However, the construction industry in Malaysia is facing several headwinds, and Kumpulan Kitacon Berhad is keenly aware of these potential challenges. The recent Budget 2025 announcement introduces several factors that could impact operational costs and market dynamics:
- The upcoming implementation of the Multi-Tier Levy Mechanism (MTLM).
- A higher minimum wage, which could increase labour costs.
- New regulations on foreign worker contributions to the Employees Provident Fund (EPF).
- Mid-2025 rationalisation of the RON95 subsidy.
- The electricity tariff hike.
In addition to these policy-driven changes, the company continues to monitor potential adverse fluctuations in building material prices. The Board has stated its commitment to closely observe market conditions and adjust strategies as needed to sustain performance and deliver long-term value to shareholders.
Shareholder Returns: Dividends
In a positive note for shareholders, Kumpulan Kitacon Berhad announced and paid a third interim dividend of 1.0 sen per ordinary share for the financial year ended 31 December 2024, amounting to approximately RM5.003 million. This payment was made on 27 March 2025. This brings the total dividend for FY2024 to 3.0 sen per share, amounting to RM15.003 million, demonstrating the company’s commitment to returning value to its investors.
Summary and
Kumpulan Kitacon Berhad’s first-quarter 2025 results paint a picture of resilience and strategic adaptation. While facing a slight dip in revenue due to projects nearing completion, the company impressively leveraged improved margins to deliver a significant increase in profit before tax and net profit. This highlights the company’s operational efficiency and ability to manage costs effectively.
The robust outstanding order book of RM1.22 billion provides a strong pipeline for future earnings, suggesting continued activity in the coming quarters. However, the Malaysian construction landscape is evolving, with various policy changes and potential cost pressures on the horizon. The company’s cautious optimism, coupled with its stated commitment to adapting strategies, will be key to navigating these challenges.
Key points to observe moving forward include:
- The company’s ability to convert its strong order book into sustained revenue growth amidst project completions.
- The impact of new government policies and rising operational costs (e.g., MTLM, minimum wage, electricity tariffs) on profit margins.
- How the company manages potential fluctuations in building material prices.
- The effectiveness of its strategies to maintain profitability and shareholder value in a dynamic economic environment.
It will be interesting to see how Kumpulan Kitacon Berhad continues to adapt its strategies to maintain its growth trajectory and profitability in the face of these industry shifts.
What are your thoughts on Kumpulan Kitacon Berhad’s Q1 FY2025 performance? Do you believe their strong order book and improved margins will be sufficient to overcome the anticipated industry headwinds? Share your insights in the comments below!
For more in-depth analyses of Malaysian companies, stay tuned to our blog for future updates.
