Gadang 1Q net profit falls 78.8% to RM2.88m on weaker construction, property earnings
Gadang Holdings Bhd reported a 78.8% decline in first-quarter net profit to RM2.88 million, as construction and property contributions weakened. Revenue fell 61.4% to RM114.79 million, with the group citing lower progress from completed or near-completed residential projects and goodwill impairment
PETALING JAYA (Oct 22): Construction and property group Gadang Holdings Bhd reported a 78.8% decline in first-quarter net profit, as contributions from its two main divisions weakened.
Net profit attributable to shareholders fell to RM2.88 million for the quarter ended Aug 31, 2026 (1QFY2027), from RM13.54 million a year earlier. Revenue dropped 61.4% to RM114.79 million from RM297.22 million. Earnings per share declined to 0.36 sen from 1.69 sen, and no interim dividend was declared.
In a Bursa Malaysia filing on Wednesday (Oct 21), Gadang said group pre-tax profit fell 67.2% to RM5.76 million from RM17.57 million, mainly due to lower construction and property contributions and goodwill impairment relating to an Indonesian water treatment plant, whose concession is expected to expire within the next 12 months.
The property division's revenue decreased 56.6% to RM38.91 million from RM89.57 million, while pre-tax profit fell 66.7% to RM5.73 million from RM17.22 million. Gadang attributed the weaker performance mainly to lower construction progress recognised from residential projects that had been completed or were nearing completion.
Construction revenue declined 66.5% to RM67.03 million from RM199.99 million, while the division's pre-tax profit fell to RM295,000 from RM3.82 million, reflecting lower progress recognised from projects nearing completion. Utilities revenue rose 15.5% to RM8.84 million from RM7.66 million, supported by the 5.9MWac large-scale solar photovoltaic plant in Tawau, Sabah, which began operating in December 2025. However, the division posted a pre-tax loss of RM383,000 against a profit of RM680,000 a year earlier, mainly due to the Indonesian water treatment plant's goodwill impairment.
On a quarter-on-quarter basis, Gadang returned to a net profit attributable to shareholders of RM2.88 million from a net loss of RM61.48 million, despite revenue declining 5.2% from RM121.10 million. The group attributed the improvement in pre-tax earnings mainly to non-recurring losses recognised in the preceding quarter, comprising RM16.6 million in additional construction costs, a RM5.52 million provision for potential liability arising from liquidated ascertained damages due to project delays, a RM25.4 million inventory write-down and RM18.88 million in power plant impairment.
On prospects, Gadang said it would pursue new construction contracts and replenish its property landbank, while prioritising cost management and disciplined project execution. Its property division remained cautious about the market outlook and would focus on products aligned with demand.
