KUALA LUMPUR (Aug 24): Sunway Construction Group Bhd (KL:SUNCON) posted a 23.5% increase in second-quarter net profit, driven by stronger profit margins across all operating segments despite lower revenue from its construction division.

Net profit for the quarter ended June 30, 2026 (2QFY2026) rose to RM103.59 million from RM83.89 million a year earlier, according to the group's Bursa Malaysia filing on Monday.

Revenue declined 31.1% to RM1.02 billion from RM1.48 billion primarily due to the peak construction progress of several data centre projects recorded in the year-ago quarter.

However, the group's construction segment recorded a 34.3% year-on-year drop in revenue to RM941.6 million. Profit before tax for the segment rose 2.8% to RM124.8 million, with profit before tax margins improving to 13.3% from 8.5%, supported by a more favourable project mix with a higher proportion of Advanced Technology Facilities (ATF) projects.

Revenue from the precast segment surged 75.3% to RM76.1 million in 2QFY2026 on higher contributions from ongoing projects, while its PBT grew significantly to RM6.5 million from RM1.2 million a year prior.

The group declared a second interim dividend of four sen per share, payable on Sept 30.

For the first half of FY2026, Sunway Construction's net profit grew 39.1% to RM222 million from RM159.61 million a year earlier, while revenue fell to RM2.04 billion from RM2.88 billion.

Year to date, the construction group said it has secured RM6.85 billion in new orders, surpassing its initial RM6 billion replenishment target for FY2026. Consequently, the group has revised its full-year order book replenishment target upward to between RM7 billion and RM9 billion. Its total outstanding order book reached RM10.5 billion as of June 2026.

On Aug 21, Sunway Construction secured an engineering work contract worth RM1.04 billion to provide mechanical, electrical and plumbing fit-out works for two projects from a multinational technology firm based in the US.

"Our outstanding order book has reached an all-time high of RM10.5 billion, providing strong earnings visibility and positioning the group well for sustainable growth,” Sunway Construction managing director Liew Kok Wing said in a statement.

Commenting on the group's outlook, Liew noted that the rapid regional adoption of artificial intelligence, cloud computing and digitalisation continues to drive demand for hyperscale data centres.

"Malaysia remains well-positioned as a preferred investment destination, supported by ongoing investment in digital infrastructure, power transmission and renewable energy initiatives… this is expected to sustain a healthy pipeline of data centre investments over the medium term," he said.

Liew added that Sunway Construction secured three new data centre-related projects during the first half of FY2026 and will actively pursue new ATF opportunities.

Shares of Sunway Construction closed 18 sen or 2.28% higher at RM8.08 on Monday, giving the group a market capitalisation of RM10.76 billion.