SC Estate Builder Berhad Q3 FY2025: Navigating Growth Amidst Strategic Shifts
Greetings, fellow investors! Today, we’re diving into the latest financial report from SC Estate Builder Berhad (SCBUILD/0109) for the third quarter ended 30 April 2025. This report offers a glimpse into the company’s performance and its ambitious journey towards sustainable growth, particularly emphasizing its commitment to Environmental, Social, and Governance (ESG) initiatives.
A crucial point to note upfront: due to a change in the Group’s financial year-end from 31 January to 31 July (for the financial period ended 31 July 2024, covering 18 months), there is no comparative financial information available for the preceding corresponding period. This means we’ll be focusing on the current period’s performance and a quarter-on-quarter comparison where applicable.
Core Financial Highlights: A Profitable Quarter Driven by Strategic Land Sale
SC Estate Builder Berhad delivered a profitable quarter, primarily boosted by a significant property development land sale. Let’s look at the key figures for the current quarter and the cumulative nine-month period:
Current Quarter Ended 30 April 2025 (RM’000)
- Revenue: 7,983
- Gross Profit: 1,588
- Profit Before Taxation: 1,007
- Profit for the Period: 795
- Basic Earnings Per Share (sen): 0.02
Cumulative 9 Months Ended 30 April 2025 (RM’000)
- Revenue: 16,033
- Gross Profit: 4,152
- Profit Before Taxation: 2,238
- Profit for the Period: 2,026
- Basic Earnings Per Share (sen): 0.05
Quarter-on-Quarter Performance
Comparing the current quarter with the immediate preceding quarter (Q2 FY2025, ended 31 January 2025), the Group showed an improved performance:
Current Quarter (30-Apr-25)
Revenue: RM7,983k
Profit Before Taxation: RM1,007k
Preceding Quarter (31-Jan-25)
Revenue: RM5,450k
Profit Before Taxation: RM926k
This indicates a healthy sequential growth in both revenue and profitability, with revenue increasing by approximately 46.5% and profit before taxation by about 8.7% quarter-on-quarter.
Financial Health: Strengthening Balance Sheet
The Group’s financial position as at 30 April 2025 shows some notable shifts:
| Financial Indicator | As at 30-Apr-25 (RM’000) | As at 31-Jul-24 (RM’000) |
|---|---|---|
| Total Assets | 46,078 | 48,675 |
| Total Equity | 43,986 | 41,960 |
| Accumulated Losses | (16,862) | (18,888) |
| Trade Receivables | 15,585 | 2,276 |
| Cash and Bank Balances | 1,289 | 6,676 |
| Total Liabilities | 2,092 | 6,715 |
| Net Assets Per Share (RM) | 0.011 | 0.010 |
Total equity increased, leading to a reduction in accumulated losses, reflecting the profitability generated during the period. The significant rise in trade receivables is directly attributed to the sale of property development land, indicating a successful realization of assets. While cash balances decreased, this was offset by a substantial reduction in total liabilities, suggesting improved financial efficiency and debt management.
Business Segments: Construction Leads the Way
The primary driver of SCBUILD/0109’s revenue and profitability continues to be its Construction/Construction services and property investment/development segment. For the current quarter, this segment contributed all of the Group’s revenue and a segment profit of RM1.517 million. Cumulatively for the nine months, it generated RM16.033 million in revenue and RM3.844 million in profit.
Other segments like Trading of building materials, Energy/Solar, and Investment holdings reported minor losses during the period, indicating they are either in early stages of development or facing operational costs that outweigh current revenues.
Strategic Outlook and Future Prospects: Building a Sustainable Future
SC Estate Builder Berhad is clearly charting an ambitious course, heavily investing in its core construction business while expanding into high-growth, ESG-aligned sectors. The company’s strategic vision, outlined by its Chairman and Managing Director/CEO, focuses on long-term sustainability and significant contributions to Malaysia’s energy transition and affordable housing goals.
Key Initiatives and Projects:
- Renewable Energy (RE): The Group is actively pursuing Large Scale Solar (LSS) projects. It was shortlisted for a 4.00 MW LSS Plant in Arau, Perlis, and has already entered into a Power Purchase Agreement (PPA) with Tenaga Nasional Berhad, with completion anticipated within two years. Additionally, it has a joint venture for LSS-Sabah 2024 projects (1 MWa.c. to 15 MWa.c.) with JK Spark Sdn. Bhd., holding a 40% stake. The company is also exploring a 1000 Ton/Ton Waste-to-Energy Project in Kota Kinabalu, Sabah.
- Affordable Housing: SCBUILD/0109 is committed to building 2,000 to 3,000 units of affordable houses with solar power on the roofs, EV chargers, and other climate-resilient features. A notable project is the joint venture for 510 units of affordable houses in Alor Setar, Kedah, where its subsidiary, SC Estate IBS Sdn. Bhd., will supply 40% of construction materials (RM84 million).
- Diversification: Beyond its traditional construction and property development, the Group is venturing into Electric Vehicle (EV) Chargers and related industries, aligning with future mobility trends.
- ESG Commitment: The company aims to achieve Net Zero Carbon Emission by 2050 and plans to invest up to RM13.5 billion in the Renewable Energy business over the next 10 years. This aligns with Malaysia’s National Energy Transition Roadmap (NETR) targets.
The Group currently holds an outstanding order book of approximately RM80.0 million and is actively seeking more contracts in construction, renewable energy, and infrastructure to strengthen its financial performance.
Funding Future Growth:
To support these ambitious plans, SCBUILD/0109 has undertaken corporate exercises. A rights issue in February 2024 raised capital, primarily for working capital. More recently, a proposed private placement of up to 30% of its issued shares was announced in February 2025, aiming to raise an estimated RM10.435 million for group projects and working capital, which has received approval from Bursa Securities in June 2025.
Summary and Investment Recommendations
SC Estate Builder Berhad’s latest quarterly report paints a picture of a company in transition, leveraging its core strengths in construction and property development to fund a strategic pivot towards sustainable and environmentally-conscious ventures. The profitability in the current quarter, driven by a land sale, provides a solid foundation as the company embarks on ambitious projects in solar energy, waste-to-energy, and affordable housing with integrated green technologies.
The Group’s commitment to ESG initiatives and alignment with national energy transition goals positions it within a growing and increasingly important sector. While the lack of comparative data due to the financial year-end change requires a focus on sequential performance, the quarter-on-quarter improvements in revenue and profit before tax are encouraging.
However, investors should be mindful of the significant capital requirements for these large-scale projects, as evidenced by the recent fundraising activities. The successful execution of these projects will be key to realizing the long-term vision and enhancing shareholder value.
- Execution Risk: The successful completion of large-scale solar plants and affordable housing projects requires substantial capital, technical expertise, and timely execution. Delays or cost overruns could impact profitability.
- Market Competition: The renewable energy and affordable housing sectors are becoming increasingly competitive. SCBUILD/0109 will need to differentiate itself and secure contracts amidst strong competition.
- Regulatory Landscape: Changes in government policies, incentives, or regulations related to renewable energy and affordable housing could impact project viability and returns.
SC Estate Builder Berhad is clearly positioning itself for a future deeply rooted in sustainability and national development goals. Do you think the company’s aggressive pivot into renewable energy and affordable housing will be the key to unlocking significant long-term value for its shareholders?
Share your thoughts in the comments below!
