MAIN Market-listed listed property developer Tanco Holdings Bhd demonstrated a remarkable earnings recovery during its 3Q FY2023 ending June 30, 2023 with net earnings of RM4.94 mil which is a significant improvement from a net loss of RM4.07 mil in the corresponding period a year ago.
This turnaround is primarily attributed to the substantial surge in the group’s revenue which amplified more than six-fold to reach RM21.19 mil in 3Q FY6/2023 from a modest RM3.14 mil in 3Q FY6/2022.
This considerable increase was mainly due to the higher revenue generated by the property development and management and construction segments.
“This significant upturn is a testament to our concerted focus on enhancing revenue streams, particularly in property development and construction,” commented Tanco’s executive director Christopher Tan Khoon Suan.
Moreover, Tanco has made commendable strides in consolidating its financial position. During the quarter, the group successfully reduced its debt by repaying a substantial bank borrowing of RM30.5 mil.
This repayment exercise will trim down the group’s financing costs and liberate assets previously held as security by the bank, hence further strengthening its balance sheet.
In addition to this, the group has also completed several strategic transactions that bolstered its property portfolio and operational efficiency.
Notably, it concluded the acquisition of a 50.1% equity interest in Gplex Properties Sdn Bhd (GPSB) while wholly owned subsidiary Tanco Builders Sdn Bhd accepted a letter of award from China Communications Construction (ECRL) Sdn Bhd for the subgrade works of the East Coast Rail Link (ECRL) project.
“Our recent strategic transactions, including the acquisition of a significant stake in GPSB, reflects our commitment to a continuous growth journey, fostering portfolio diversification and operational efficiency,” shared Tan.
“We believe that as strategic partners, the alignment of our interest and synergy generated from our collaboration will create long-term values.”
The positive trend continued into the first nine months of its financial year ending June 30, 2023 with Tanco registering a substantial net profit of RM15.44 mil, a drastic improvement from a net loss of RM9.38 mil in the previous financial year.
On the same note, the group’s revenue saw a monumental jump, increasing 15-fold to RM72.22 mil, up from RM4.84 mil during the same period last year.
“Despite a challenging macroeconomic landscape, we are undeterred and executing our growth plans. We strongly believe in the capability of the post-GE-15 (15th General Election) government to drive economic growth and facilitate trade,” projected Tan.
“These anticipated positive changes would open doors for us to enhance our core business sectors. We stand ready to seize these opportunities and continue our growth journey.”
While mindful of potential macroeconomic challenges such as persistent inflation, tightening of monetary policies, geopolitical tensions and fluctuating commodity prices, Tanco remains focused on its growth prospects for the remainder of 2023.
At the close of today’s mid-day trading, Tanco was down 0.5 sen or 0.59% to 52 sen with 32.57 million shares traded, thus valuing the company at RM986 mil. – June 6, 2023
