Jaks Latest QR Summary

JAKS RESOURCES BERHAD is a company in Malaysia engaged in multiple business segments. Here is a summary and analysis of its financial situation and investment prospects:

Financial Highlights (for the period ended 30 September 2024):

✅ 1. Revenue Growth:
The company's revenue for the current quarter ended 30 - Sep - 2024 was RM14,103,000, showing a 41% growth compared to the same quarter last year (RM9,984,000). For the cumulative period, revenue was RM41,410,000, a 51% increase from the previous year's RM27,456,000. The growth was driven by all segments except construction.

✅ 2. Profitability:
- The gross profit for the current quarter was RM2,438,000, lower than the previous year's RM4,900,000. However, due to a significant share of profit in the joint venture (RM36,292,000 in the current quarter vs. RM35,962,000 last year), the profit before taxation was RM17,938,000 in the current quarter, a substantial increase from RM2,203,000 in the previous year's same quarter.
- Net profit for the period was RM17,890,000, with earnings per share of 0.91 sen (basic and diluted), compared to 0.33 sen in the previous year's quarter.

3. Financial Position:
- Total assets as of 30 September 2024 were RM2,381,975,000, with non - current assets mainly comprising property, plant, and equipment (RM286,512,000) and investment in joint venture (RM980,252,000). Current assets included contract assets (RM88,513,000), trade and other receivables (RM397,921,000), etc.
- Equity attributable to owners of the parent was RM1,554,485,000, and non - controlling interests were - RM75,641,000. Total equity was RM1,478,844,000. Non - current liabilities included long - term borrowings (RM409,133,000), and current liabilities consisted of trade and other payables (RM429,030,000), bank borrowings (RM59,047,000), etc.

❌ 4. Cash Flows:
- Operating activities generated a net cash outflow of RM29,903,000, mainly due to an operating loss before working capital changes and changes in working capital components.
- Investing activities had a net cash inflow of RM20,015,000, mainly from dividend received from the joint venture and a decrease in deposits pledged.
- Financing activities had a net cash outflow of RM13,677,000, due to interest paid, repayment of short - term borrowings, etc., despite proceeds from the issuance of share capital.

Business Segment Analysis:

❌ 1. Construction: Revenue declined by 55% in the current quarter (RM1,763,000) compared to last year (RM3,952,000) due to lower revenue recognition from local projects nearing completion. Loss before tax narrowed to RM7,418,000 in the current quarter from RM7,791,000 last year.

✅ 2. Property Investment: Revenue increased by 11% in the current quarter (RM3,085,000) compared to last year (RM2,775,000), supported by additional tenant contributions. Loss before tax reduced to RM9,485,000 in the current quarter from RM10,141,000 last year.

✅ 3. Power - Energy: This segment started operations after the commissioning of the 50MW solar photovoltaic project in August 2023. It contributed revenue of RM4,649,000 and profit before tax of RM295,000 in the current quarter.

✅ 4. Investment Holding & Others: Recorded revenue of RM4,606,000 in the current quarter and a significant share of profit in the joint venture (RM34,546,000). In the previous year's third quarter, there was a charge out of LTIP expenses.

Prospects and Risks:

1. Power - Energy Division: The LSS4 solar project has begun contributing to revenue, and the division aims to expand its renewable energy portfolio. Profits from this division are expected to help the company amid challenges in construction and retail malls. However, the renewable energy sector is competitive, and success depends on factors like regulatory support, technological advancements, and access to suitable projects.

2. Construction Division: Operating in a challenging environment with rising costs and a slowdown in the Malaysian construction sector. The division needs to be selective in project selection to offset inflationary pressures. Its ability to secure profitable projects and manage costs will impact its future performance.

3. Property Investment Division: Focused on improving occupancy and rental yields of properties like Evolve Mall and Pacific Tower Business Hub. Success in these efforts could enhance the division's contribution to the company's overall performance, but it may face competition and market uncertainties in the property market.

⚠️ Conclusion:

Investing in JAKS RESOURCES BERHAD has both potential opportunities and risks. The company has shown revenue growth and improved profitability in the current quarter, driven by the performance of segments like Power - Energy and the share of profit in the joint venture. The expansion plans in the renewable energy sector and efforts in property investment and construction could lead to future growth. However, the construction division faces challenges in a competitive and cost - pressured environment, and the success of the Power - Energy division's expansion and the property investment division's initiatives is not guaranteed. Potential investors should carefully consider these factors, conduct further research, and assess their risk tolerance before making an investment decision. Additionally, the company's financial position and cash flow situation need to be monitored closely, especially its ability to manage debt and generate consistent operating cash flows in the future.