KUCHING: Property developer, Naim Holdings Bhd, has reported weaker bottom line, with group net profit falling by more than RM28.4 million (-60 per cent) to RM17.9 million in the second quarter ended June 30, 2025 (2Q 2025) from RM46.3 million a year ago despite a sharp increase in revenue to about RM51.5 million from RM36.2 million.
A major contributor to the drop in earnings was Naim’s share of after-tax profit from its associate, Dayang Enterprise Holdings Bhd, by RM18.5 million to RM21.5 million from RM40 million in 2Q2024.
The company’s earnings per share slipped to 3.57 sen from 9.24 sen.
In the first half of 2025 (1H2025), Naim group net profit declined by about RM34.5 million to RM14.8 million from RM49.3 million (1H2024) in tandem with decreased revenue by RM23.5 million to RM93.7 million (RM117.2 million).
In 1H2025, the construction segment was the biggest revenue earner recording about RM48 million (1H2024:RM83.6 million), followed by property development segment RM28.7 million (RM16.4 million) and the others segment (including hotel and retail leasing operations, quarry operations) RM17.1 million (RM17.13 million).
Naim attributed the drop in revenue to weaker sale performance and slower progress on existing projects.
However, the property development segment had posted sharply higher sales of RM28.7 million (1H2024:RM16.4 million), reducing its pre-tax loss to RM1.4 million (-RM5.26 million).
The improved performance was achieved as a result of higher work progress from on-going development projects.
The group also managed to secure new property sales of about RM27.2 million, similar to that in 1H2024,Naim said in explanatory notes to its financial results.
The plunge in revenue of the construction segment was due to slower work progress on existing projects, resulting in the segment to incur pre-tax loss of RM687,000, a reversal from profit of RM13.1 million in 1H2024 due to the settlement of a litigation with a contractor then.
The others segment pre-tax loss widened to RM2.48 million (-RM1.78 million) despite little change in revenue due to some fixed overheads and interest expense. The hotel and retail leasing operations had reported improvement in their occupancy rates this year.
The 2Q2025 financial results came in better as compared to the immediate preceding quarter (1Q2025) when Naim group revenue was lower at RM42.3 million (2Q2025:RM51.5 million) and incurred pre-tax loss of RM1.95 million (+ RM19.34 million).
The big jump in profit was due to net share of profit contribution from Dayang which amounted to RM18.6 million (1Q2025: RM2.9 million).
In the current quarter under review, the property development reported revenue of RM16.5 million (1Q2025:RM12.22 million) and narrowed its pre-tax loss to RM210,000 (-RM1.29 million).
The construction segment also posted higher revenue of RM26.1 million (RM21.9 million) and returned to the black with pre-tax profit of RM243,000 (-RM930,000) due to increased work progress at sites of existing construction projects.
The other segment also reported improved performance, with revenue rose to RM8.92 million (RM8.15 million) and cut its pre-tax loss to RM804,000 (-RM1.68 million).
For the period under review, Naim said Dayang reported sharply lower after-tax profit of RM89 million (2Q2025:RM159.3 million) due to a reduction in work orders/contracts, coupled with lower vessel chartering rates and vessel utilisation levels.
As at June 30, 2025, Dayang’s estimated call-out contracts stood at about RM5 billion. Naim is Dayang’s single largest shareholder.
On prospects, Naim said for the property development segment, the company had continuously implemented various sales and marketing initiatives to clear its existing inventory while cautiously launching new development projects at competitive prices amid rising costs of materials and financing.
“While the Malaysian property sector remains soft and challenging in the near term, we maintain a positive outlook on the upcoming growth prospects, particularly in Sarawak,” it said.
For the construction segment, Naim said the management is closely monitoring the current projects to ensure their timely completions with the expected returns.
Naim expects the others segment to gradually improve in its contribution to the group in the near term, particularly in the retail and commercial leasing and hotel business in Miri and Bintulu.
“Various initiatives are carried out to improve productivity and operational efficiency. More prudent debt management practices are also implemented with close monitoring and management of collections from retail leasing business,” said the company.
