GDB revenue rises 3.8% to RM70.9 million in 2Q19 [PRESS RELEASE]

  • Timely acquisition of Malaysian piling player presents the Group with new opportunities in light of uptick in construction tender activity;
  • Order book stood at RM538.3 million to be recognized until 2021;
  • Declares first interim dividend of 1 sen in respect of FY2019

Selangor, Malaysia, 21 August 2019 – Construction services firm GDB Holdings Berhad (GDB, GDB控股有限公司, Bloomberg: GDB:MK, Reuters: GDBH.KL) recorded a 3.8% higher revenue in the second quarter ended 30 June 2019 (2Q19) to RM70.9 million from RM68.4 million a year ago.

The growth in revenue was driven by higher progress billings from the construction of AIRA Residence and Menara Hap Seng 3. In addition, GDB also recorded maiden contribution from building the mixed development project of ‘Perla’ in Ara Damansara in 2Q19.

Despite the increase in revenue, 2Q19 net profit decreased by 24.0% to RM6.9 million in 2Q19 from RM9.1 million previously due to higher profit recognition from completed projects in the previous financial quarter.

Cumulatively, GDB’s revenue for first half ended 30 June 2018 (1H19) decreased 9.2% to RM135.7 million from RM149.5 million in the previous corresponding period. In line with lower revenue contribution, the Group’s net profit declined 11.1% to RM14.0 million from RM15.7 million last year.

On its future prospects, GDB’s Managing Director Mr. Cheah Ham Cheia stated that the Group is fully focused on completing on-going projects and believes GDB’s tendering prospects would be boosted by the addition of Eco Geotechnics Sdn Bhd (Eco Geotechnics) to the Group.

Managing Director of GDB Holdings Berhad, Mr. Cheah Ham Cheia (谢汉正) said:

“The addition of Eco-Geotechnics’ geotechnical and foundation engineering capabilities has enabled the GDB to become an integrated construction player capable of catering to a larger clientele base.

With this extended capability, GDB intends to explore new opportunities within the construction and property development industry, which would require sub-structure works. We are also looking at securing jobs beyond Klang Valley.

On top of that, GDB remains steadfastly committed in maintaining our stellar safety and quality track record, as this remains a highly-regarded criteria by project owners in selecting a main contractor. This is well-demonstrated by our recent achievement of receiving yet another score above 90% from Construction Industry Development Board (CIDB) in Safety and Health Assessment System in Construction (SHASSIC) for our high safety standards in building AIRA Residence.

Overall, the Group believes the combination of GDB’s reputation coupled with synergistic benefits from Eco-Geotechnics places us in favourable position to bolster our RM538.3 million orderbook in light of the returning tender activity.”

On 23 July 2019, GDB entered into a Share Sale Agreement (SSA) to acquire 70% controlling stake in Eco Geotechnics, a construction contractor specialising in geotechnical and foundation engineering works, for purchase consideration of RM5.96 million.

Eco Geotechnics’ past projects include works for Tropicana Garden, Sunway Velocity, Tropicana underpass tunnel along Persiaran Surian, Sunway South Quay, Horizon Tower in Bangsar, One South in South City, as well as jobs for Mass Rapid Transit (MRT) line 1 and Light Rapid Transit (LRT) 2. Eco Geotechnics has also completed the first deep basement project in Melaka.

GDB’s order book stood at a healthy level of RM538.3 million as at 30 June 2019, which provides positive earnings visibility until financial year ending 31 December 2021. The Group’s on-going projects are AIRA Residence in Damansara Heights, Menara Hap Seng 3 within the Kuala Lumpur city centre and Perla mixed development in Ara Damansara, Petaling Jaya.

GDB declared an interim dividend of 1 sen in respect of FY2019 with ex-date on 4 September 2019 and payment date on 23 September 2019. The dividend payout of RM6.3 million represents 44.7% of the Group’s 1H19 net profit.