Sunway Construction Group's net profit rebounds 26% in FY2020

This is mainly attributed to the final settlement of the Uttar Pradesh construction project in India.

The net profit of Sunway Construction Group (SCGB MK) rebounded strongly in 4Q20, equating to a 26% increase QoQ, reports Maybank IB Research.

The rebound is mainly attributed to the final settlement of the Uttar Pradesh construction project in India, which ramped up the work pace at Sunway Carnival Mall Extension and Sunway Medical Centre Seberang Jaya.

Its precast revenue also gained high profits QoQ due to projects in Singapore being allowed to restart.

However, precast revenue was still down on a YoY comparison. This is following Singapore’s Circuit Breaker and movement restrictions in foreign workers’ dormitories which affected work pace in early 4Q20.

Based on the FY2020 results review, the company had lower construction revenue and EBIT margins due to more than two and a half months of no activity following Malaysia’s Movement Control Order.

Meanwhile, the lower precast revenue and EBIT were attributed to having no activity for most of 2Q20 in Singapore and below 50% in 3Q20.

SCGB is Malaysia’s largest pure-play construction group. It commenced operations in 1981 and has a cumulative revenue of US$6.91 b (MYR28 b). Among its completed special purpose building projects include KL Convention Centre and Sunway Shopping Mall. It also has completed civil projects in its portfolio such as SILK, MEX, SKVE, BRT, KVMRT, and KVLRT.

(US$1 = MYR 4.05)