What a start to 2025 for Sunway Construction Group Berhad (SunCon)! The latest interim financial report for the first quarter ended 31 March 2025 paints a vibrant picture of robust growth, driven by strategic execution and a strong market position. This report is more than just numbers; it’s a testament to the company’s resilience and forward momentum, especially with the announcement of a first interim single-tier dividend of 5.00 cents per ordinary share for the financial year ending 31 December 2025, payable on 25 June 2025.
Let’s dive into the core figures that are making headlines and explore what’s truly driving SunCon’s performance this quarter.
Core Data Highlights: A Quarter of Remarkable Growth
Overall Group Performance: Surpassing Expectations
SunCon has delivered an outstanding performance in the first quarter of 2025. Compared to the same period last year, both revenue and profit before tax (PBT) have more than doubled, showcasing significant operational leverage and market demand.
Q1 2025 Revenue
RM1,400.5 million
Q1 2024 Revenue
RM604.8 million
This represents a staggering growth of over 100% in revenue, indicating a massive increase in project activities and efficient execution.
Q1 2025 Profit Before Tax (PBT)
RM113.2 million
Q1 2024 Profit Before Tax (PBT)
RM41.6 million
The PBT also saw a growth of over 100%, with the PBT margin improving from 6.9% to an impressive 8.1%, reflecting enhanced profitability and cost management.
Looking at the quarter-on-quarter performance, SunCon has maintained its impressive growth trajectory, even against the typically strong immediate preceding quarter (Q4 2024).
Q1 2025 Revenue
RM1,400.5 million
Q4 2024 Revenue
RM1,400.3 million
Revenue remained stable, showing consistent project delivery, while PBT saw a modest but positive increase.
Q1 2025 Profit Before Tax (PBT)
RM113.2 million
Q4 2024 Profit Before Tax (PBT)
RM110.6 million
The PBT margin slightly improved from 7.9% to 8.1%, which is particularly encouraging given that the first quarter is often seasonally softer due to festive periods affecting construction progress.
Segmental Performance: Construction Leads the Charge
The stellar overall performance is primarily attributed to the Construction segment, which continues to be the powerhouse for SunCon.
Construction Segment
Q1 2025 Revenue
RM1,369.9 million
Q1 2024 Revenue
RM543.6 million
Q1 2025 PBT
RM112.0 million
Q1 2024 PBT
RM37.9 million
Similar to the group, the Construction segment’s revenue and PBT more than doubled year-on-year, with the PBT margin improving from 7.0% to 8.2%. This remarkable growth was largely fueled by the accelerated execution of several data center projects, significantly boosting revenue recognition and profitability.
Quarter-on-quarter, the Construction segment also showed strong momentum:
Q1 2025 Revenue
RM1,369.9 million
Q4 2024 Revenue
RM1,353.9 million
Q1 2025 PBT
RM112.0 million
Q4 2024 PBT
RM107.2 million
The segment edged past its typically strongest quarter (Q4 2024) in both revenue and PBT, with the PBT margin rising from 7.9% to 8.2%. This was primarily driven by accelerated progress on a data center project in Johor.
Precast Segment
The Precast segment experienced a moderation in performance, both year-on-year and quarter-on-quarter.
Q1 2025 Revenue
RM30.6 million
Q1 2024 Revenue
RM61.2 million
Q1 2025 PBT
RM1.2 million
Q1 2024 PBT
RM3.7 million
Revenue decreased by 50.0% and PBT by 67.6% compared to the corresponding quarter last year. The stronger performance in Q1 2024 was due to projects at their peak delivery stage. In the current quarter, the segment is transitioning and awaiting the ramp-up of new project deliveries.
Quarter-on-quarter, the Precast segment also saw a decrease:
Q1 2025 Revenue
RM30.6 million
Q4 2024 Revenue
RM46.4 million
Q1 2025 PBT
RM1.2 million
Q4 2024 PBT
RM3.4 million
Revenue decreased by 34.1% and PBT by 64.7%. The lower turnover was due to softer deliveries, contrasting with Q4 2024 which benefited from project margin recalibrations. Despite this, the segment’s existing order book provides strong visibility for the next two years, with momentum expected to recover as new project deliveries ramp up.
Financial Position: Strong and Liquid
SunCon’s balance sheet remains robust, reflecting a healthy financial position.
| Financial Position | As at 31 March 2025 (RM’000) | As at 31 December 2024 (RM’000) |
|---|---|---|
| Total Assets | 3,858,461 | 3,596,230 |
| Total Equity | 1,033,219 | 938,500 |
| Cash and bank balances | 1,521,081 | 1,015,763 |
| Net Assets Per Share Attributable To Owners Of The Parent (RM) | 0.75 | 0.68 |
The significant increase in cash and bank balances from RM1,015.8 million to RM1,521.1 million highlights strong cash generation from operations. Net cash generated from operating activities surged to RM545.9 million in Q1 2025, a substantial improvement from a net cash used of RM11.0 million in Q1 2024. This strong cash flow position provides SunCon with ample liquidity to fund its operations and future growth initiatives.
Risk and Prospect Analysis: Navigating the Future
Order Book and Market Outlook
SunCon’s outstanding order book stands strong at RM6.648 billion, with RM2.214 billion in new orders secured year-to-date in 2025. This provides excellent revenue visibility for the coming years. For 2025, the Group has set an ambitious new order replenishment target ranging from RM4.5 billion to RM6.0 billion.
The Malaysian economy expanded by 4.4% in Q1 2025, driven by robust domestic demand and steady investment activities. The construction sector itself grew by 14.2%, a healthy indicator for SunCon’s core business.
Advanced Technology Facilities (ATF) and Data Centers (DC)
SunCon continues to solidify its leadership in the Advanced Technology Facilities (ATF) segment, particularly within the booming data center (DC) space. Having completed one DC project, the Group is currently managing five ongoing projects for four major multinational clients. While global reports suggest some tech firms are scaling back or deferring DC investments, SunCon notes robust progress at its project sites and a healthy tender pipeline. Furthermore, potential revisions to AI chip export restrictions from the U.S. administration could further bolster market sentiment and drive infrastructure investments in Malaysia’s digital economy.
Diversification Beyond Data Centers
Crucially, SunCon’s strategy is not solely reliant on the DC segment. The Group remains agile and opportunity-driven, actively participating in a wide array of public and commercial tenders. These include large-scale infrastructure projects like the Penang LRT and the Penang International Airport Expansion, as well as industrial and logistics facilities such as factories and warehouses. Additionally, SunCon benefits from a steady pipeline of in-house projects from its parent company, Sunway Berhad, particularly involving high-spec, special-purpose buildings.
Singapore Market and Precast Segment
In Singapore, the economic outlook is more cautious, with the Ministry of Trade and Industry (MTI) revising its 2025 GDP growth forecast downward. The construction sector in Singapore also contracted in Q1 2025. However, the Housing Development Board (HDB) remains committed to delivering a significant number of flats, which is crucial as over 90% of SunCon’s precast segment sales are tied to Singapore’s HDB projects. Beyond HDB, the Precast division is strategically expanding into industrial and data center projects, having already secured two such projects, which should help mitigate the current softness.
Material Litigation
The report also details ongoing material litigation cases. SunCon is involved in a dispute in India regarding an arbitral award, where the company has filed an appeal and a contempt application. Separately, in Malaysia, SunCon is a second defendant in a claim related to the LRT3 project, where the plaintiff is claiming a substantial sum for trespass and encroachment. SunCon’s solicitors are of the opinion that the claim is excessively inflated and speculative, and that a third party is liable to indemnify SunCon should it be found liable.
Summary and
Sunway Construction Group Berhad has kicked off 2025 with an exceptionally strong first quarter, demonstrating remarkable growth in both revenue and profitability. The Construction segment, particularly driven by data center projects, has been the primary engine of this success. While the Precast segment faces temporary headwinds, its strategic diversification and strong order book offer clear visibility for future recovery. The company’s robust financial health, characterized by significant cash generation and a healthy order book, positions it well to navigate market dynamics and pursue new opportunities.
SunCon’s proactive approach to diversifying its project pipeline beyond data centers, coupled with its strong ties to the Sunway Group, provides a solid foundation for sustained performance. The company’s management appears confident in achieving positive growth for the full financial year 2025, barring unforeseen circumstances like fluctuations in building material prices.
However, it is important for observers to remain mindful of the ongoing material litigation cases, which, while the company’s solicitors view them as manageable, represent potential contingent liabilities.
Key points from this report:
- Exceptional revenue and profit growth in Q1 2025, largely driven by accelerated data centre project execution.
- Strong and liquid financial position with significant increase in cash and robust operating cash flows.
- Outstanding order book of RM6.648 billion provides excellent revenue visibility.
- Strategic focus on Advanced Technology Facilities (ATF) while actively diversifying into other infrastructure and commercial projects.
- Precast segment’s current moderation is expected to recover with new project deliveries and expansion into industrial/DC projects.
- Declaration of a first interim dividend signals confidence in current performance and shareholder returns.
From a professional standpoint, SunCon’s ability to maintain growth momentum despite seasonal softness and to strategically position itself in high-growth areas like data centers, while also diversifying, is highly commendable. The company’s financial discipline, as evidenced by its cash flow generation, further strengthens its operational capabilities.
Do you think SunCon can maintain this impressive growth momentum throughout the rest of 2025, especially given the dynamic market conditions and their ambitious order replenishment targets? Share your thoughts in the comments section below!
