Malaysian property and construction giant, IBRACO BERHAD, has just released its First Quarter 2025 (1Q2025) financial results, and they paint a picture of robust growth when compared to the same period last year. Despite facing an evolving market landscape, the company has demonstrated impressive resilience, underscored by significant increases in both revenue and profit. This report not only highlights strong operational performance but also brings good news for shareholders with the announcement of a proposed dividend.
The core message from this report is clear: IBRACO has delivered substantial growth in the first quarter of 2025 compared to the previous year. Revenue soared by an impressive 130%, while profit attributable to owners of the parent skyrocketed by 156%. This strong performance is further complemented by the Board’s proposal of a final single-tier dividend of 2.00 sen per ordinary share for the financial year ended 31 December 2024, reflecting the company’s commitment to shareholder returns. Read on to dive deeper into the numbers and what they mean for IBRACO’s future.
Core Data Highlights: A Closer Look at IBRACO’s Performance
Strong Growth Compared to the Same Period Last Year (1Q2025 vs 1Q2024)
IBRACO’s financial performance in the first quarter of 2025 showed remarkable strength when measured against the same quarter in 2024. The company’s revenue more than doubled, driven primarily by its core construction and property segments. This significant top-line growth translated directly into healthier profits across the board.
1Q2025
Revenue: RM184.05 million
Profit Before Tax: RM20.54 million
Profit Attributable to Owners: RM13.55 million
Basic Earnings Per Share: 2.48 sen
1Q2024
Revenue: RM80.14 million
Profit Before Tax: RM8.80 million
Profit Attributable to Owners: RM5.30 million
Basic Earnings Per Share: 0.97 sen
The stellar increase in revenue by 130% was largely propelled by the construction segment, which saw its revenue jump from RM28.50 million in 1Q2024 to RM110.31 million in 1Q2025. The property segment also contributed significantly, with revenue rising from RM42.16 million to RM63.84 million during the same period. This impressive revenue growth, coupled with a decrease in administrative expenses (down to RM10.38 million from RM12.04 million, mainly due to lower professional fees), allowed the company to achieve a 134% surge in profit before tax and a 156% increase in profit attributable to owners of the parent.
Sequential Performance: A Look at the Immediate Preceding Quarter (1Q2025 vs 4Q2024)
While the year-on-year comparison is highly positive, a sequential look at the immediate preceding quarter (4Q2024) reveals a moderation in performance. This is a common trend in industries like property and construction, where project cycles and year-end completions can impact quarterly revenue recognition.
1Q2025
Revenue: RM184.05 million
Profit Before Tax: RM20.54 million
Profit Attributable to Owners: RM13.55 million
Basic Earnings Per Share: 2.48 sen
4Q2024
Revenue: RM236.50 million
Profit Before Tax: RM30.11 million
Profit Attributable to Owners: RM21.97 million
Basic Earnings Per Share: 4.02 sen
Revenue for the current quarter decreased by 22% from RM236.50 million in 4Q2024, mainly due to a slowdown in both the property and construction segments. The property segment’s revenue declined from RM91.49 million to RM63.84 million, and the construction segment’s revenue decreased from RM130.33 million to RM110.31 million. Additionally, other income saw a notable decrease from RM6.33 million in the immediate preceding quarter to RM0.99 million, primarily because a fair value gain on investment properties was recognized in 4Q2024 but not in 1Q2025. Administrative expenses, however, also saw a reduction from RM16.66 million to RM10.38 million, attributed to lower staff costs and professional fees.
Segmental Performance: Key Contributors
Understanding the performance of each business segment provides deeper insight into IBRACO’s operational strengths and areas needing attention. Here’s a breakdown of how each segment performed:
| Segment | 1Q2025 Revenue (RM’000) | 1Q2024 Revenue (RM’000) | 1Q2025 Segment Profit/(Loss) (RM’000) | 1Q2024 Segment Profit/(Loss) (RM’000) |
|---|---|---|---|---|
| Property Development | 63,837 | 42,163 | 5,702 | 6,326 |
| Construction Works | 110,313 | 28,496 | 15,954 | 1,850 |
| Quarry Operation | 4,744 | 4,833 | 24 | 311 |
| Manufacturing | 2,706 | 2,422 | (1,861) | (32) |
| Others | 2,450 | 2,226 | 905 | 580 |
The Construction Works segment was the standout performer, significantly boosting both revenue and profit. Its revenue more than tripled, and segment profit saw an even more dramatic increase. The Property Development segment also saw healthy revenue growth, indicating continued demand for IBRACO’s properties, although its segment profit experienced a slight dip despite higher revenue. This could be due to project mix or increased operational costs within the segment. Meanwhile, the Manufacturing segment continues to face challenges, reporting a larger loss in 1Q2025 compared to the previous year, despite an increase in revenue. This suggests potential issues with cost management or lower margins in this segment. The Quarry Operation saw a slight dip in revenue and a more significant decline in profit, while the ‘Others’ segment showed positive growth in both revenue and profit.
Financial Health: Balance Sheet and Cash Flow
As of 31 March 2025, IBRACO’s total assets stood at RM1.28 billion, a slight increase from RM1.27 billion at the end of 2024. Total equity also saw a healthy increase to RM532.01 million from RM517.20 million, reflecting the quarter’s profits. However, total loans and borrowings increased by RM53.31 million to RM479.10 million compared to 31 December 2024. This increase in borrowings suggests the company is leveraging debt to fund its ongoing projects and expansions.
From a cash flow perspective, the quarter saw net cash used in operating activities increase significantly to RM51.86 million (from RM12.87 million in 1Q2024), indicating higher working capital requirements. However, this was largely offset by strong net cash generated from financing activities, which surged to RM53.16 million (from RM26.69 million in 1Q2024), primarily from proceeds from loans and borrowings. Overall, cash and cash equivalents experienced a slight net decrease of RM0.77 million for the period, settling at RM62.60 million at the end of March 2025.
Risk and Prospect Analysis: Navigating the Future
IBRACO operates in dynamic sectors, and its performance is inherently tied to the broader economic environment, raw material costs, and market demand for its products. The company acknowledges these factors and has outlined strategies to navigate them effectively.
The Group remains optimistic about Malaysia’s economic recovery in 2025 and is confident in its ability to remain resilient despite ongoing challenges such as a subdued property market, rising cost of living, and elevated interest rates. To mitigate the impact of cost volatility, construction contracts are generally awarded on a lump-sum basis, which helps reduce exposure to fluctuating material and labor prices.
IBRACO’s future prospects are bolstered by its strong unbilled sales of RM285.74 million and an outstanding order book of RM961.89 million as of 31 March 2025, providing a solid foundation for future revenue. The company’s strategic focus remains on its flagship development, The NorthBank, a 123-acre vibrant township designed for modern living with established amenities, including an educational institution, a social clubhouse, an Autonomous Rapid Transit (ART) station, and an upcoming private healthcare centre.
Beyond The NorthBank, progress on the 76-acre Arden City township in Kota Samarahan is on track. This integrated development benefits from its proximity to key healthcare and educational institutions and will also feature an upcoming ART station. Furthermore, IBRACO has expanded its footprint into West Malaysia with Residensi NewUrban in Petaling Jaya, a project the Group is confident in due to its strategic location and excellent accessibility.
In the construction sector, IBRACO continues to actively bid for government infrastructure projects, such as parts of the second trunk road at Kota Samarahan Division, infrastructure works for the Kuching Urban Transportation System, and the New Operator Residence 2 at Bakun. These initiatives aim to strengthen the Group’s income sources amidst the current property market sentiment.
Crucially, IBRACO is expanding its presence across the building and construction value chain to enhance efficiency and support its core activities. This includes operating a quarry plant at Pulau Salak, with plans to expand capacity with a new license for Gunung Sinmajau by the second half of 2025. The Group also runs a ready-mixed concrete operation, and its new asphalt mixing plant commenced operations in March 2025. Additionally, the production of mild steel cement-lined pipes has begun, signifying a broader integration of supply chain elements.
Summary and
IBRACO’s First Quarter 2025 results demonstrate a remarkable year-on-year growth trajectory, particularly in its key construction and property segments. The significant increases in revenue and profit attributable to owners of the parent highlight the company’s operational strengths and its ability to capitalize on market opportunities. The proposed dividend also underscores a commitment to shareholder returns. While the sequential quarter-on-quarter performance shows a natural moderation, it’s important to view this in the context of project cycles and the absence of one-off gains present in the previous quarter.
The company’s substantial unbilled sales and outstanding order book provide a strong outlook for future revenue generation. Furthermore, IBRACO’s strategic expansion into new townships, its continued pursuit of government infrastructure projects, and its vertical integration into the construction value chain through quarry, concrete, asphalt, and pipe manufacturing operations, position it for long-term resilience and diversified income streams. These initiatives aim to mitigate external market pressures and enhance operational efficiency.
However, potential investors should remain mindful of the prevailing market conditions. Key risk points to consider include:
- Sensitivity to fluctuations in raw material and labor costs, despite mitigation efforts through lump-sum contracts.
- The evolving dynamics of market demand for properties, which remains subdued.
- The impact of rising cost of living and elevated interest rates on consumer purchasing power and project financing.
- Competition in securing government construction and infrastructure projects.
- The performance and profitability of newer ventures within the expanded value chain, particularly the manufacturing segment which currently shows a loss.
In conclusion, IBRACO seems to be strategically positioning itself for long-term growth by diversifying and strengthening its value chain, despite short-term market headwinds. Their proactive approach to securing new projects and expanding into complementary businesses could provide a more stable foundation for future earnings.
What are your thoughts on IBRACO’s diversification strategy? Do you believe their expansion into the construction value chain will provide sustainable growth? Share your views in the comment section below!
