Financial review for current quarter and financial year to date
Current quarter ("1Q 2024") against preceding year corresponding quarter ("1Q 2023")
For the 1Q 2024, the Group reported a revenue of RM271.898 million and profit before tax of RM23.008 million as compared to the revenue of RM322.898 million and profit before tax of RM3.182 million reported in the 1Q 2023.
The performance of the respective operating business segments for the 1Q 2024 under review as compared to the 1Q 2023 is analysed as follow:
Construction operations
The construction segment reported a higher revenue of RM165.259 million for the 1Q 2024 as compared to RM156.932 million in 1Q 2023. The revenue maintains stable as compared to 1Q 2023 as our Rapid Transit System Link ("RTS Link") projects are progressing steadily. The segment results has improved as compared to the preceding year corresponding quarter mainly due to our Setiawangsa-Pantai Expressway ("SPE") project which is nearing completion, there are some savings on the construction cost upon the gradual finalisation of the sub-contractors' final account and certifications.
Property development
The property development segment reported a revenue of RM5.889 million for the current quarter as compared to RM66.384 million in the preceding year corresponding quarter. Similarly, the segment's result has declined from a profit of RM10.745 million in 1Q 2023 to a loss of RM0.154 million in 1Q 2024. This is primarily attributed to lower sales concluded from EkoCheras during the current quarter and some preliminary expenses incurred for our new upcoming property development, EkoTitiwangsa, which will be launched once we have finalised all the authorities submission.
Toll operations
The toll operations segment registered a higher revenue of RM56.490 million in 1Q 2024 as compared to RM50.982 million in 1Q 2023, indicating an increase of approximately 10.80% in revenue. The higher revenue in this current reporting quarter was due to the increase in traffic volume for Duke Phase-1 and Phase-2 and also from the higher contribution of toll collection from Wangsa Maju section of the SPE highway as compared with the 1Q 2023. As a result, this segment reported a higher profit of RM46.069 million in 1Q 2024 as against RM42.872 million in 1Q 2023.
Plantation
For the current quarter 1Q 2024, the plantation segment registered a lower revenue of RM31.739 million and a segment result of a profit of RM6.443 million as compared with revenue of RM37.752 million and segment result of a profit of RM11.248 million in the preceding year corresponding quarter. The decrease in revenue and earnings were mainly attributed to the lower sales contribution from the oil palm plantation, weaker commodity price for crude palm oil, decline in yield of oil palm estates and comparatively weaker margin for offtake of downstream durian products.
Food and Beverages
The F&B division has registered a lower revenue of RM2.644 million for 1Q 2024 as against the preceding year corresponding quarter of RM3.398 million. The decline in revenue was mainly attributed to the restructuring of the F&B outlets within the group, where certain outlets were closed to pave the way forward to a new approach in franchising and licencing. Other than this, the higher operating and staff costs incurred for the recent opening of the new restaurant, DUKE's Kitchen in INNSiDE by Meliá Hotel in EkoCheras has also led to a higher loss of RM1.354 million in 1Q 2024 as compared to a loss of RM0.249 million in 1Q 2023.
Property Investment and others
The property investment segment's revenue for the current quarter in comparison to the corresponding quarter of the preceding year has improved from RM7.450 million in 1Q 2023 to RM9.877 million in 1Q 2024. The increase in the revenue is mainly due to the newly opened INNSiDE by Meliá Hotel in EkoCheras in March 2023 and lesser rebates was given to the tenants of EkoCheras Mall as compared to the preceding corresponding quarter.
The Board remains optimistic in delivering positive financial results and is confident each of the Group's segments would contribute positively to the Group's performance for the new financial year ending 30 June 2024.
The Group had also experienced steady increase in toll revenue for Duke Phase-1 and Phase-2 upon the upliftment of the MCO since October 2021, and with the full opening of the SPE on 3 November 2023 will further improve the toll collection revenue under this operating segment, notwithstanding that financing costs for SPE will no longer be capitalised in the financial statements once the toll full opening.
The Board will continue to explore the right opportunities which will contribute to both the property development and construction segment simultaneously. In the near term, the Group is finalising the financial requirement and the authorities' submission for the launch of the upcoming new property development for the Group. As for the construction segment, the Board expects that the on-going rationalisation of the construction scope under the RTS Link project will contribute positively to the Group's future construction revenue and earnings. In addition, the Group is continuously working closely with Government on various infrastructure projects.
Our subsidiary, PLS Plantations Berhad ("PLS"), is in a transition phase from its core business in traditional oil palm plantation to the broader agrofood industry. PLS's transformation journey from the cyclical oil palm plantation to a more diversified range of upstream and downstream activities will require a longer gestation period. In particular, the gestation period for the durian trees is about 4 to 5 years and thus, the bulk of our durian revenues is only from trading activities. In the near term, PLS will continue its current rehabilitation and sanitation works with emphasis on recommended practices to improve the production yield of its oil palm estates, matured durian plantation and contract farm. In addition, PLS will continue to work closely with its current and prospective business associates to improve the retail offtake rate of downstream durian products by offshore wholesalers and end consumers. Concurrently, upstream investment in durian plantation will continue to be a mainstay of PLS to complement its existing downstream business.
This is in line with the long-term group strategy to expand and diversified into other businesses to reduce dependency and reliance on our existing businesses in construction, property development and toll operations.