KUALA LUMPUR (June 5): Hartanah Kenyalang Bhd, a Sarawak-based construction services firm scheduled to be listed on the ACE Market on June 9, is optimistic on its prospects, given the positive outlook for Sarawak's construction industry.
The group reported a net profit of RM1.89 million for its first quarter ended Jan 31, 2025 (1QFY2025), on revenue of RM44.77 million, which was mainly contributed by key projects such as the State Archive Project, Yayasan International School Sibu Project, Yayasan International School Kuching Project, Sekolah Daif Tambay Project and Sekolah Daif Tebedu Project.
No comparative figures were provided for the preceding corresponding quarter and period as this is the first interim financial report for the first quarter.
The company's gross profit margin, however, dropped from 18.35% in FY2024 to 13.02% in 1QFY2025.
Hartanah Kenyalang's chief financial officer Desmond Foo explained that this was because the company is currently in the process of applying for variation orders for its completed contracts. Consequently, the company has incurred costs but has yet to recognise the corresponding revenue, which has impacted its gross profit margin.
A variation order deals with changes in specifications of the contract, Foo said.
"So once the variation order is approved and we can recognize those variation orders, then the profit [revenue] will generally normalise upwards," he added.
Looking ahead, Hartanah Kenyalang aims to expand its building and infrastructure construction activities within Sarawak and secure design-and-build projects from prospective clients.
Hartanah Kenyalang primarily offers building construction services, focusing on institutional buildings such as schools and other non-residential structures, as well as infrastructure construction services, particularly bridges and roads.
As of April 30, 2025, the company's tender book stands at RM451 million. Additionally, in February 2025, it secured the Gendong Infrastructure Project, valued at RM46.31 million, from Borneo Development Corporation (Sarawak) Sdn Bhd. This project is expected to be completed by October 2026.