KERJAYA: Earnings Exceed Expectations on Strong Project Execution and Property Sales

A leading construction and property development group has reported robust financial results for the second quarter of fiscal year 2025 (2QFY25), with net profit climbing 46.6% year-on-year to RM54.5 million. This strong performance, primarily driven by enhanced project progress in its construction segment and significant contributions from property development, has positioned the group well, leading to an ‘Outperform’ rating being maintained by PublicInvest Research.

The group’s 2QFY25 revenue also saw a substantial increase of 36.4% year-on-year, reaching RM539.5 million. Cumulatively, the first-half (1HFY25) net profit stood at RM100.4 million, aligning comfortably with both PublicInvest Research’s and consensus full-year estimates, accounting for 52.6% and 51.0% respectively.

Performance Review

The construction segment was a key growth driver, with its revenue rising 25.4% year-on-year to RM470.0 million, attributed to improved project progress. Profit from this segment mirrored the revenue growth, increasing 51.3% year-on-year to RM44.3 million.

The property development division also delivered a stellar performance, with revenue surging more than twofold year-on-year to RM68.8 million. This was largely propelled by ongoing sales at its two flagship projects, The Vue @ Monterez and Papyrus @ North Kiara. The segment’s profit surged by almost threefold to RM10.9 million, further cementing its contribution to the group’s overall profitability.

In addition to the strong earnings, the group declared a second interim dividend of 3.0 sen per share, bringing the year-to-date dividend to 6.0 sen, an increase from 5.0 sen in 1HFY24.

Future Outlook

Looking ahead, the group’s focus will remain on its core construction segment. It boasts a substantial outstanding construction orderbook of RM3.9 billion, providing clear earnings visibility for the next two to three years. Year-to-date job wins have reached RM870.3 million, achieving 54.4% of the FY25 orderbook replenishment target of RM1.6 billion.

PublicInvest Research stated that it maintains its ‘Outperform’ call on the group with an unchanged PE-based target price of RM2.85, indicating a significant upside from its current price of RM2.08. The group plans to continue concentrating on securing projects with higher margins and will proactively monitor and address various business and economic challenges.