Kerjaya Prospek Group Q1 2025: A Strong Start to the Year Amidst Market Dynamics

Greetings, fellow investors! Today, we’re diving deep into the latest financial report from KERJAYA PROSPEK GROUP BERHAD for the first quarter ended 31 March 2025. This report offers a compelling snapshot of the company’s performance, highlighting significant growth in key areas, particularly in its core construction business and a remarkable surge in property development. While the numbers paint a generally optimistic picture, it’s essential to understand the underlying drivers and the landscape the company navigates. Let’s unpack the details and see what this quarter tells us about Kerjaya Prospek’s trajectory.

Core Financial Highlights: A Quarter of Robust Growth

Kerjaya Prospek Group has kicked off the financial year 2025 with an impressive performance, demonstrating strong top-line and bottom-line growth. The company’s strategic focus on its construction segment, complemented by its thriving property development and investment activities, has yielded positive results. Here’s a look at the standout figures for the first quarter:

The Group reported a revenue of RM 471.98 million for Q1 2025, marking a significant 40.0% increase from RM 337.14 million in the corresponding quarter of last year. This substantial growth was primarily driven by improved progress in construction work activities.

Profit Before Tax (PBT) surged by 39.1% to RM 63.76 million, up from RM 45.85 million in Q1 2024. This indicates strong operational efficiency and effective cost management alongside revenue expansion.

Net Profit After Tax (PAT) also saw a healthy increase of 38.9%, reaching RM 46.67 million compared to RM 33.61 million in the same period last year.

Basic Earnings Per Share (EPS) for the quarter stood at 3.65 sen, a commendable 37.2% improvement from 2.66 sen previously, reflecting enhanced profitability for shareholders.

Diving Deeper: Segmental Performance Breakdown

Understanding the contribution of each business unit is crucial for a complete picture. Kerjaya Prospek operates across several key segments, with construction remaining its primary driver. Here’s how each segment performed:

Construction Segment

The construction segment continues to be the backbone of the Group’s operations. For Q1 2025, this segment recorded a total revenue of RM 537.18 million, a substantial 42.20% increase from RM 377.76 million in the corresponding quarter last year. Segmental profit also saw a significant jump of 57.2% to RM 51.35 million (Q1 2024: RM 32.66 million). This growth is attributed to improved progress in construction work activities, reinforcing its position as the main contributor to the Group’s overall revenue and profitability.

Property Development Segment

This segment showcased an extraordinary performance, with total revenue soaring to RM 49.09 million in Q1 2025, compared to just RM 7.35 million in Q1 2024 – an astounding 567.84% increase. Consequently, segmental profit skyrocketed by 843.82% to RM 7.56 million (Q1 2024: RM 0.80 million). The remarkable increase in both revenue and profit was largely driven by positive contributions from its two development projects: The Vue @ Monterez and Papyrus @ North Kiara.

Manufacturing Segment

The manufacturing segment, which complements the Group’s construction activities, also reported growth. Revenue increased by 22.21% to RM 1.82 million (Q1 2024: RM 1.49 million), and segmental profit jumped by an impressive 469.64% to RM 0.32 million (Q1 2024: RM 0.06 million).

Investment Segment

The Investment segment recorded a segmental profit of RM 31.16 million in Q1 2025, an increase of 19.16% from RM 26.15 million in the corresponding quarter. This segment’s income primarily stems from dividend and interest income.

Financial Health and Cash Flow Overview

A quick glance at the balance sheet and cash flow statements reveals the Group’s financial position:

Statement of Financial Position (as at 31 March 2025 vs 31 December 2024)

Total assets decreased by approximately 13.06% to RM 1.93 billion, mainly due to changes in current assets, particularly a reduction in contract assets and trade and other receivables. This reduction in assets is balanced by a significant decrease in liabilities.

Total liabilities saw a substantial decrease of 27.61% to RM 787.92 million, reflecting a healthier balance sheet. This reduction was primarily driven by a significant decrease in trade and other payables, and contract liabilities.

Total equity saw a slight increase of 0.70% to RM 1.14 billion, indicating a stable and growing shareholder base.

Net assets per share attributable to owners of the company increased marginally to RM 0.91, up from RM 0.90 at the end of 2024.

Cash Flow Statement (Year-to-Date 31 March 2025 vs 31 March 2024)

The Group generated strong cash flow from operations, with net cash generated of RM 87.98 million, a slight increase from RM 86.76 million in the same period last year. Net cash used in investing activities significantly decreased, from RM 14.91 million in Q1 2024 to RM 2.67 million in Q1 2025, indicating less capital expenditure. Net cash used in financing activities also reduced to RM 19.48 million from RM 25.59 million, partly due to lower dividend payments compared to the prior period. Overall, net increase in cash and cash equivalents for the period surged by 42.29% to RM 65.82 million, reflecting healthy liquidity.

Outlook, Risks, and Strategic Responses

Kerjaya Prospek Group remains optimistic about its future, particularly its construction segment, which is expected to continue being the primary revenue driver. The Group is well-supported by a robust outstanding order book of RM 4 billion for construction contracts as at 31 March 2025, providing strong earnings visibility for the coming years.

However, the company acknowledges the challenges in the current operating environment. Key risks identified include:

• Volatility of Ringgit Malaysia: Fluctuations in the local currency can impact material costs, especially for imported components.
• Shortage of Skilled Manpower: A persistent challenge in the construction industry that can affect project timelines and costs.
• Rising Material Costs: Inflationary pressures and supply chain issues can lead to increased project expenses.

To address these challenges, the Group is committed to continuously monitoring the market and implementing appropriate business strategies in a timely manner. This includes maintaining its manufacturing segment to complement its core construction business and leveraging its property development projects (The Vue @ Monterez and Papyrus @ North Kiara) for positive contributions.

Material Litigation Updates

The report also provides updates on ongoing material litigation cases, which could have financial implications. These include:

• Pembinaan Yeng Tong Sdn. Bhd. vs Kerjaya Prospek (M) Sdn. Bhd.: KPM is denying a claim of RM35.8 million for works done and counterclaimed RM4.2 million. The legal proceedings are ongoing with trials fixed.
• Kerjaya Prospek (M) Sdn. Bhd. vs BCM Holding Sdn. Bhd.: KPM is seeking RM20 million in liquidity damages, while BCM has counterclaimed alleging conspiracy. The legal proceedings are ongoing.
• Kerjaya Prospek (M) Sdn. Bhd. vs Apple 99 Development Sdn. Bhd.: KPM is claiming specific performance of a settlement agreement and hotel sale agreement, or alternatively, RM105.14 million in outstanding sums. An adjudicator has recently decided that Apple 99 shall pay KPM RM75.46 million plus interest and costs, with Apple 99 filing applications to set aside and stay this decision.
• Kerjaya Prospek (M) Sdn Bhd vs Yong Tai Berhad and Datuk Wira Boo Kuang Loon: KPM is also pursuing claims against the corporate and personal guarantors of Apple 99 for the outstanding sum of RM105.14 million. The legal proceedings are ongoing.

While these litigations are ongoing, the company is taking necessary actions to defend its positions and pursue its claims.

Shareholder Returns: Dividends

In a positive move for shareholders, the Board of Directors approved a fourth interim dividend of 3.0 sen per ordinary share for the financial year ended 31 December 2024. This dividend, totaling RM 37.82 million, was paid on 28 March 2025. Furthermore, the company has declared a first interim single-tier dividend of 3.0 sen per ordinary share for the financial year ending 31 December 2025, to be paid on 30 June 2025. This consistent dividend payout reflects the company’s commitment to returning value to its shareholders.

What are your thoughts on Kerjaya Prospek Group’s latest quarterly results? Do you believe their strategy to focus on construction while growing property development will enable them to maintain this momentum in the coming quarters? Share your insights in the comments below!