KUCHING: Ibraco Bhd has reported sharply lower group net profit of about RM5.3 million in first quarter to March 31, 2024 (1Q2024) from RM10.4 million a year ago due mainly to lower property sales and higher administrative expenses.
The decreased earnings were recorded despite higher group revenue of RM80.1 million from RM79.2 million in 1Q2023.
Earnings per share fell to 0.97 sen from 1.91 sen during the same period of comparison.
In the current quarter under review, Ibraco said the group’s property development segment reported lower sales of RM42.2 million (1Q2023: RM59.3 million), thereby forcing its segment profit to drop to RM6.33 million (RM10.83 million) while the property holding & management segment also recorded lower revenue of RM1.73 million (RM2.16 million) and lower segment profit of RM1.04 million (RM1.3 million).
The construction works segment, however, registered a strong performance, with its revenue from external customers climbed to RM28.5 million (RM10.96 million), lifting its profit to RM1.85 million (RM333,000).
The quarry operation segment turned in lower revenue of RM4.83 million (RM6.83 million) and reported sharply lower segment profit of RM311,000 (RM1 million).
The new ready-mixed concrete segment turned in revenue of RM2.42 million (zero) but incurred segment loss of RM32,000 whereas the clubhouse operation segment posted revenue of RM498,000 (zero) and loss of RM463,000.
In 1Q2024, Ibraco said the one per cent increase in group revenue was primarily recognised from the sale of apartment suites at ContiNew, Kuala Lumpur, The NorthBank Renna Residence, The Corliss Residence and Horizon Residence at Bintulu Town Square, townhouses at Alyvia Residence and apartments at IXORA Court, three-storey detached house at Crestwood Estate, three-storey shops, single-storey lock-up shops and eight-storey commercial block at The NorthBank Commercial Centre, three-storey shop offices at Hagen Avenue at Bintulu Town Square and The Atrium in Samarahan.
Revenue was also contributed by the group’s construction business — NR4-Northern Regional for Sarawak Water Supply Grid Programme (stressed area) project, building works for the Sarawak Methanol project, Sarawak government project, new operator residence 2 located at Bakun and Sarawak Second Trunk Road Package A1-A. Also generating sales were ready-mixed concrete operation and clubhouse operation as well as rental income from investment properties.
“Administrative expenses increased to RM12.04 million from RM7.68 million in 1Q2023. The increase was mainly due to the increase in staff cost, professional fee, depreciation of property, plant and equipment in 1Q2024,” Ibraco said in its financial results.
Ibraco’s 1Q2024 financial results were also weaker as compared to the immediate preceding quarter (4Q2023) when group revenue stood at RM105.4 million (1Q2024: RM80.1 million) and net profit of RM9.89 million (RM5.3 million).
However, the group’s administrative expenses were down to RM12 million in 1Q2024 from RM16.85 million in 4Q2023 due mainly to decrease in staff costs (i.e. bonus and contribution to approved provident funds) and impairment losses on receivables.
As of 1Q2024, Ibraco said the group’s unbilled sales stood at RM208.6 million and an outstanding order book of RM1.13 billion.
“The group is optimistic of the recovery of Malaysia’s economy in 2024 and is confident to remain in a resilient position despite the challenging local property market conditions amid the rising cost of living and an elevated interest rate environment,” it added.
In the next few years, Ibraco said the NorthBank flagship development, spanning across 123 acres, continues to be the group’s key focus.
“This new township creates a vibrant economy and convenience to the surrounding communities, which offers purchasers with a variety of choices in the types of residences built within walking distance to commercial and office units and also other community facilities, such as an exclusive social clubhouse and healthcare facility.
“Furthermore, the group has acquired the rights to develop a 76-acre site in Samarahan Division at the end of 2021, which will be our next highly integrated self-sustaining township development — Arden City. This upcoming township consists of a mixture development of commercial, offices, residential, healthcare and leisure.”
Apart from The NorthBank and Arden City developments, Ibraco said the group had entered into contracts for the construction works for the implementation of affordable housing project at Matang land district, and various development activities at Muara Tuang land district.
And beyond the shores of Sarawak, Ibraco said it had launched an affordable service apartment project — Residensi NewUrban — in Bandar Petaling Jaya Selatan in March 2024. Sitting on a 6.1acre land, the project offers 922 units of build-ups from 553 sq ft to 1,000 sq ft. “The group holds optimistic expectations for this strategically located development due to its excellent accessibility and surrounding conveniences.”
