Ibraco’s 3QFY25 within expectations, stronger 4Q expected

KUCHING (Dec 1): Ibraco Bhd’s third quarter of financial year 2025 (3QFY25) results has come within expectations and analysts from TA Securities Holdings Bhd (TA Research) are expecting the group to post a stronger 4QFY25.

During the period under review, Ibraco’s revenue grew by 4.8 per cent quarter on quarter (q-o-q) to RM202.3 million thanks to faster growth from its property development and construction segments which helped to offset a 23.3 per cent contraction from its quarry segment.

The group’s normalised profit grew at a faster 15.1 per cent to RM13.2 million, mainly due to better margins from its property development segment.

Cumulatively, Ibraco’s first nine months (9M) of FY25 saw its revenue surging by 77.5 per cent year on year (y-oy) to RM579.3 million from across the broad growth of all its segments while its normalised profit grew by a robust 42.9 per cent to RM38.3 million.

TA Research guided that this was broadly within expectations and accounted for about 70 epr cent of their full-year forecasts.

They added that the robust earnings growth was underpinned by stronger construction contributions as several government infrastructure projects in Sarawak moved into more advanced stages.

For the quarter ahead, TA Research is expecting Ibraco to post stronger earnings, underpinned by faster work progress across ongoing projects and maiden contribution from the new Demak Laut light industrial development catering to SME and logistics demand.

Furhter ahead, TA Research guides that they remain positive on Ibraco’s outlook thanks to its strong foothold in Sarawak, healthy property sales, and solid construction margins.

“Key ongoing projects such as The NorthBank, Arden City, and Residensi NewUrban will anchor property earnings, while the upcoming Regency Specialist Hospital enhances The NorthBank’s long-term value and recurring traffic,” said the analyst.

Meanwhile, the group’s construction division continues to benefit from public infrastructure rollouts, while vertical integration via quarry, concrete, asphalt, and pipe manufacturing operations is expected to enhance cost efficiency and margins.

“The new quarry at Gunung Sinmajau, commencing in 2H25, should further strengthen self-sufficiency in building materials.”

While TA Research maintains their forecasts on Ibraco’s earnings alongside a sum-of-parts derived target price (TP) of RM1.41 per share, they downgrade their previous ‘buy’ call on the group to ‘hold’ as they believe most of the positives have been priced in following a 10 per cent share price appreciation over the past three months.