KUALA LUMPUR: Ageson Bhd's net profit slid almost half to RM6.58 million in the second quarter (Q2) ended December 31, 2021, from RM12.38 million recorded in the same quarter a year ago.
In a filing to Bursa Malaysia, the company said the property development division is still impacted by the low market sentiments mainly affected by the spread of the Covid-19 Omicron variant.
Revenue in the same quarter surged 80.9 per cent to RM80.83 million from RM44.68 million.
In a separate statement, the company said the higher revenue was mainly due to the higher billing recognised from the trading of construction materials.
For the first half (1H), Ageson's net profit increased 46.9 per cent to RM25.64 million from RM17.46 million, while revenue surged to RM133.23 million from RM66.19 million.
Ageson executive director Datuk Seri Chin Kok Foong said during the 1H, the company has taken proactive measures to shift into trading of building materials to offset the impact of the Covid-19 pandemic on its construction business.
"This is important as the construction division remains the sole contributor to the company's revenue as the property development division is still struggling from the prolonged Covid-19 pandemic and the emerging Omicron variant.
"Our commendable results were driven by the group's agile management and workforce to respond to the evolving market dynamics and uncertainties due to the pandemic," he said.
Going forward, Chin said Ageson is optimistic on the outlook for 2022 as the economic recovery in Malaysia continues at the back of various stimulus packages introduced by the government.
"We are starting to see the resumption of construction works, infrastructure projects and property development. This recovery momentum bodes well with Ageson's business strategy and put us in a good position to tap on the rising construction activities in Malaysia," he said.
Chin added that the trading of construction materials will continue to sustain earnings for Ageson while the resumption of construction works and award of property development projects will drive growth going forward.
As for the property development project, he said the company will shift towards public-private partnership projects in Malaysia and tap into overseas projects by exploring business partnerships with foreign multinational enterprises.
"This strategy allows Ageson to initiate an asset-light strategy to collaborate with the potential government bodies to secure more landbank for the further expansion of the company," he added.
Aside from that, he said the company will also partner with Shuangling Holdings Ltd, an established property developer in China, to undertake a proposed mixed property development project in Selangor.
The project has a gross development value (GDV) of RM95.2 million, and the development tenure will take around two years from the expected commencement date of the said development.
Meanwhile, Chin said Ageson plans to strengthen its balance sheet by improving its gearing level to zero via fundraising exercise.
"This will improve the coompany's cash flow position and put Ageson in a strong position to take on upcoming large-scale public-private partnership projects," he said.