Malaysian property and construction group, SBC Corporation Berhad, has just released its unaudited financial results for the fourth quarter and full financial year ended 31 March 2025. The report paints a picture of significant financial recovery, particularly in its profit figures, signaling a robust turnaround for the company. While the global economy presents ongoing challenges, SBC’s strategic focus on property sales and new project launches has clearly paid off, making this report a compelling read for investors and industry observers alike.

Core Financial Highlights: A Remarkable Turnaround

SBC Corporation Berhad has demonstrated impressive growth across key financial metrics for both the latest quarter and the full financial year. The significant increase in profitability stands out, driven primarily by successful sales of completed inventories and land.

Quarterly Performance (Q4 FY2025 vs Q4 FY2024)

The latest quarter saw revenue grow by 9% to RM32.82 million. More strikingly, Profit Before Tax surged by over 100% to RM21.99 million, and Profit After Tax followed suit with a similar dramatic increase to RM20.74 million. This translated into a substantial improvement in Basic Earnings Per Share, jumping from 0.64 sen to 8.07 sen.

Full Financial Year Performance (FY2025 vs FY2024)

For the full financial year, revenue increased by 12% to RM65.89 million. The company’s full-year Profit Before Tax exploded by over 100% to RM23.52 million, a testament to effective strategies in property development. Profit After Tax also saw a significant boost, reaching RM17.81 million, leading to a Basic Earnings Per Share of 6.75 sen, a substantial leap from 0.12 sen in the previous year.

Comparison with Immediate Preceding Quarter (QoQ)

Comparing the current quarter to the immediate preceding quarter (Q3 FY2025), revenue jumped by 80%, and Profit Before Tax soared by over 100%. This quarter-on-quarter acceleration highlights strong operational momentum and successful execution in the final period of the financial year.

Segmental Performance: Mixed Fortunes

A deeper dive into the business segments reveals the primary drivers of the Group’s performance:

The Property Development segment was the star performer, despite a slight decrease in revenue, its Profit Before Tax surged by over 100% to RM23.53 million. This was largely attributed to the sales of completed inventories and land, effectively managing the timing between project completions and new commencements.

The Investment segment also showed a strong turnaround, moving from a loss of RM6.45 million in the previous year to a profit of RM1.75 million, with a 49% increase in revenue.

Conversely, the Construction segment faced challenges, reporting a loss of RM1.35 million, a significant decline from a profit of RM0.53 million in the prior year, despite a 77% increase in revenue.

Financial Health: A Stronger Balance Sheet and Cash Flow

SBC Corporation’s financial position has also strengthened. Total Assets increased to RM593.08 million from RM581.57 million, while Total Liabilities saw a reduction to RM166.52 million from RM172.82 million. This positive shift is reflected in the Net Assets Per Share, which rose to 167 sen from 160 sen.

A notable improvement is seen in cash and bank balances, which jumped to RM32.56 million from RM8.70 million. The company’s total borrowings decreased to RM106.56 million from RM112.88 million, indicating a healthier debt profile due to the retiring of old borrowings.

The cash flow statement further reinforces this positive trend: Net Cash From Operating Activities turned significantly positive at RM25.69 million, a stark contrast to a negative RM20.51 million in the previous year. This substantial improvement in operational cash generation is a strong indicator of the company’s improved business efficiency and financial liquidity.

Risks and Prospects: Navigating Economic Headwinds with Strategic Launches

The Board of Directors acknowledges the prevailing economic uncertainties and challenges posed by the global economy and targeted government measures. However, they remain optimistic due to the strategic locations of their projects and ongoing support from financiers.

The property and construction sectors are inherently cyclical, and SBC Corporation is not immune to these broader economic factors. The company anticipates that the remaining Gross Development Value (GDV) of RM100 million for JQ Central can be achieved once market sentiment recovers within the next one to two years.

To counter market preferences shifts post-Covid-19, the Group has focused on re-designing products, which has led to a delay of 6 to 9 months in the commencement of new projects. Despite this, the company is actively pursuing new developments:

• Q Suites (JQ Waterfront): The next phase of JQ Waterfront, with an estimated GDV of RM280 million, has commenced construction works in late 2024.
• Kiara East (Kuala Lumpur): Planning for the next phase in Kuala Lumpur, with an estimated GDV of RM300 million, is progressing, with an anticipated launch by mid-2026.

In the interim, the Group continues to focus on the sale of its completed projects and is actively seeking decent returns from its investment segment. The company anticipates that its assets employed and liabilities incurred will grow in the coming years, reflecting its expansion plans.

What are your thoughts on SBC Corporation Berhad’s performance? Do you believe the company can maintain this growth momentum and successfully launch its new projects in the current market environment? Share your views in the comment section below!