KUALA LUMPUR (Oct 6): Construction firm service SLGC Bhd (KL:SLG) said on Tuesday that it has undertaken value-engineering measures to cushion the impact of rising construction material costs amid geopolitical tensions.
Value engineering is the process of adjusting a project with a client to achieve the same performance, while identifying alternatives to materials or specifications.
“We have experienced construction material costs [having] increased recently, but we have managed this by proposing various value-engineering exercises to our clients,” its managing director Yong Zheng Lin told reporters after the company’s debut on Bursa Malaysia’s ACE Market on Tuesday.
“For instance, we have suggested changes in specifications or brands to our clients as part of these exercises as a way for us to offset the rising cost,” he added.
Construction costs have continued to rise in line with higher oil prices, exerting cost pressure on the group’s margins, though Yong did not indicate any specific figure for the percentage of costs increase.
To mitigate the impact, the group said it is also negotiating with subcontractors and locking in material prices early with its suppliers.
According to Yong, the group currently has a tender book of over RM1 billion, with an estimated success rate of 10% to 15%.
As at Aug 12, the total unbilled contract value of its ongoing construction projects stood at RM1 billion, to be recognised progressively over the next five financial years until FY2030.
On potential data centre contracts, Yong said: "We’re still exploring and discussing the opportunities but the group hasn't had any successful deal yet".
For the financial year ended Dec 31, 2025 (FY2025), SLGC’s net profit dropped to RM13.99 million, compared with RM16.03 million a year earlier, but revenue rose to RM324 million from RM229.64 million.
The group has two revenue segments, which residential segment contributed 74.95% out of total revenue for FY2025 and non-residential segment made up the remaining 25.05%.
The company is mainly involved in design and building construction services for residential and non-residential works. SLGC’s customers include property developers and building owners in Malaysia.
SLGC shares settled three sen or 10.7% lower at 25 sen on its maiden trading day on Tuesday, valuing the company at RM140 million.