Gadang ... Feb10

Gadang has interest in construction, property and plantation as well as being a water concessionaire.

Construction continues to be the main breadwinner for Gadang in terms of revenue, with the company bidding for some RM2 billion worth projects.
Among the notable projects Gadang is eyeing are the Pahang-Selangor Water Transfer project, worth estimated Rm300 million, and Petronas’ proposed US$300 million Kimanis power plant in Sabah.

It has also placed itself in the running for a portion of the work on the proposed Kelana Jaya and Ampang line LRT upgrades – expected to kick off in 2010.

Its balanced sheet as at end Nov 2009 shows the company holding RM78 million worth of short and long term debt of, while cash is RM17.8 million. The borrowings are mostly secured performance bonds, which is the norm when companies take on large projects. Its actual debts are only around 30% and 40% of that amount.

At the moment its order book stands at some Rm700 million.

While construction is its main focus in 2010, its water concessionaire business is to be a big revenue contributor over the next five years.

It holds controlling stakes in five Indonesian water supply companies and is looking to China as the next step.

Its property arm announced the acquisition of a parcel of land in Salak South for Rm33 million and has GDV of Rm250 million.

It has projects in Johor, Penang, Kedah and Selangor with a combined GDV of Rm509 million.

Its plantation unit has ventured into plantations, having signed two agreements with a landowner in Sabah to develop 5200 acres of land into a palm oil plantation. Its eventual goal is to own 25000 acres of plantation land over the next five years.

Financial Results …

Its net profit surged 88% to RM3.52 million in its second quarter ended Nov 30, 2009 from RM1.87 million a year earlier mainly due to lower cost.

Revenue fell 6.9% to RM62.37 million from RM66.98 million, while basic earnings per share (EPS) rose to 2.98 sen from 1.59 sen. No dividend was declared.

For six months to Nov 30, 2009, net profit rose 67% to RM7.37 million from RM4.42 million a year earlier mainly due to improved gross profit margins in the construction division and cost savings. Revenue growth was relatively flat at RM120.78 million versus RM119.94 million previously.