Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial performance of AVALAND BERHAD, a prominent player in Malaysia’s property development sector. Their interim financial report for the quarter ended 31 March 2025 has just been released, and it offers a fascinating glimpse into their operations, challenges, and strategic vision.
While the report indicates a moderation in revenue compared to the previous year, AVALAND has demonstrated commendable resilience through effective cost management. What truly stands out are their robust unbilled sales, which provide a strong pipeline for future earnings, and their ambitious plans for new project launches. Let’s break down the numbers and see what AVALAND is building for the future.
Q1 2025 Performance: A Detailed Look
Revenue and Profitability
AVALAND’s revenue for the first quarter of 2025 saw a moderation, primarily due to several key projects nearing completion, such as Aetas Damansara, Alira Subang Jaya, and Sanderling 1. While new launches are on the horizon, they haven’t yet reached a stage to significantly offset this decline.
Q1 2025 Revenue
RM179.5 million
Q1 2024 Revenue
RM214.6 million
This revenue moderation naturally impacted the gross profit for the quarter, which also saw a decline compared to the corresponding period last year.
Q1 2025 Gross Profit
RM57.9 million
Q1 2024 Gross Profit
RM66.7 million
However, AVALAND’s disciplined approach to cost management helped mitigate the impact on their bottom line. Despite lower revenue and gross profit, their profit before tax for Q1 2025 remained solid, reflecting their operational efficiency.
Q1 2025 Profit Before Tax
RM26.4 million
Q1 2024 Profit Before Tax
RM32.3 million
Earnings Per Share (EPS)
The earnings per share for the quarter also reflect the overall performance, showing a slight decrease compared to the same period last year.
Q1 2025 Basic/Diluted EPS
1.38 sen
Q1 2024 Basic/Diluted EPS
1.45 sen
Financial Health Snapshot
Looking at the balance sheet, AVALAND’s financial position remains robust. One of the most encouraging aspects is the growth in their unbilled sales, which is a key indicator of future revenue.
Unbilled Sales as at 31 March 2025
RM944 million
Unbilled Sales as at 31 December 2024
RM900 million
This increase in unbilled sales is a testament to healthy sales performance and provides excellent earnings visibility for the coming years, indicating a strong revenue pipeline.
Total assets for the group also saw a slight increase, from RM2,103,280 thousand at 31 December 2024 to RM2,111,173 thousand at 31 March 2025. Total equity also grew to RM1,055,592 thousand from RM1,033,997 thousand over the same period, contributing to an improved net assets per share of RM0.72 (compared to RM0.71 as at 31 December 2024).
From a cash flow perspective, the first quarter of 2025 saw a net cash outflow from operating activities, which is a shift from the positive inflow in the same period last year. This is largely influenced by changes in working capital, particularly a significant increase in contract assets.
Net Cash (Used In) Operating Activities Q1 2025
(RM64,520) thousand
Net Cash Generated From Operating Activities Q1 2024
RM9,841 thousand
Outlook and Strategic Direction
Sales and Project Pipeline
New sales for Q1 2025 were RM147.5 million, a decrease from RM206.9 million in the corresponding period last year. This was primarily due to several successful projects like Aetas Damansara, Casa Embun, Sanderling 1, and Alira Subang Jaya becoming fully sold out. However, AVALAND is not resting on its laurels.
The company has already launched two projects in 2025: the first phase of Meria in Cybersouth (a commercial hub with a Gross Development Value (GDV) of RM123 million) and Tower B of Alora Residences (GDV of RM220 million). They plan to launch another RM934 million worth of projects in the remainder of the year, bringing their total planned launches for 2025 to an impressive RM1.3 billion. This aggressive launch schedule is expected to fuel their next phase of growth.
Industry Trends and Support
The Malaysian property sector continues to show a positive outlook, driven by consistent demand for residential properties. Loan applications for property purchases saw a slight increase in Q1 2025, reflecting confidence in Malaysia’s stable interest rate environment. Furthermore, incentives from Budget 2025, such as increased allocation for the Housing Credit Guarantee Scheme and tax relief for homes priced below RM750,000, are expected to further stimulate demand, especially among first-time homebuyers and young families.
Long-Term Vision
AVALAND’s cautious optimism is well-founded. Their projects are strategically located and offer strong value propositions that align with current market needs. The company boasts a substantial landbank of 192 acres across the Klang Valley, with an estimated GDV of RM11 billion. This provides significant earnings visibility for the next decade. To ensure sustainable growth and strengthen its market position, AVALAND is actively seeking strategic land acquisitions to expand its landbank and enhance future earnings potential.
Summary and Future Prospects
AVALAND BERHAD’s Q1 2025 report presents a mixed picture of moderated revenue but strong underlying financial health and an ambitious outlook. While revenue saw a dip due to projects nearing completion, the company’s effective cost management helped cushion the impact on profitability. The significant increase in unbilled sales provides a robust foundation for future earnings, and their proactive approach to launching new projects, coupled with strategic land acquisitions, positions them well for sustained growth in the buoyant Malaysian property market.
The positive industry trends, supported by government incentives and stable interest rates, create a favorable environment for property developers. AVALAND’s existing landbank offers long-term earnings visibility, and their commitment to exploring new opportunities underscores their dedication to long-term value creation.
However, like any investment, there are considerations to keep in mind:
- The immediate challenge of lower contributions from mature projects impacting current quarter revenue.
- The shift to negative cash flow from operations for the quarter, driven by an increase in contract assets.
- The effective tax rate being higher than the statutory rate due to non-deductible expenses and non-recognition of deferred tax assets from some loss-making entities.
- The need for new project launches to quickly gain traction and offset the revenue shortfall from fully sold projects.
AVALAND’s strategic focus on market-aligned projects and landbank expansion suggests a clear path forward. The property sector in Malaysia continues to show resilience, and AVALAND appears poised to capitalize on this momentum.
What are your thoughts on AVALAND’s strategy to navigate the property market? Do you believe their new project launches will effectively drive the next phase of growth? Share your insights in the comments below!
