Crescendo Corporation Berhad: FY2026 Financial Performance and Key Developments

Overview and Key Financial Highlights

Crescendo Corporation Berhad (“Crescendo” or “the Group”) has released its unaudited financial statements for the financial year ended 31 January 2026. The Group reported a significant decrease in revenue and profitability compared to the previous year, primarily due to the absence of a major one-off land sale that had positively impacted FY2025 results.

• FY2026 Revenue: RM445.2 million, down 61% from RM1,151.0 million in FY2025.
• Profit Before Tax (PBT): RM133.9 million, a sharp decline of 81% from RM701.2 million.
• Profit Attributable to Owners: RM92.3 million, down 82% from RM526.3 million.
• Basic Earnings Per Share: 10.96 sen (FY2025: 62.79 sen).
• Total Assets as at 31 Jan 2026: RM2.01 billion.
• Net Assets Per Share: RM1.68 (unchanged from FY2025).

Segmental Performance

The Group’s core business remains in property development and construction, which continues to be the largest revenue and profit contributor. For FY2026, this division generated RM367.7 million in revenue and RM119.7 million in operating profit, driven by a major data center land sale at Nusa Cemerlang Industrial Park (NCIP), representing about one-third of the segment’s revenue and over 60% of its operating profit.

Other segments performed as follows:

• Manufacturing & Trading: Revenue RM67.7 million (up from RM60.7 million), with operating profit of RM22.5 million (last year: loss of RM0.6 million). The turnaround was partly due to the disposal of land in Q2, contributing RM30 million in gains. However, the segment saw operating losses in the latest quarter due to relocation and setup costs for a new pre-cast facility.
• Property Investment: Revenue RM16.1 million, operating profit RM10.8 million.
• Services & Others: Revenue RM62.8 million, operating profit RM36.5 million, with international school operations improving despite lower management fees from the property division.

Balance Sheet and Cash Flow

The Group’s financial position remains robust, with total assets at RM2.01 billion and net assets per share at RM1.68. Cash and cash equivalents stood at RM75.5 million as at 31 January 2026, down from RM157.3 million a year earlier, mainly due to significant dividend payments and investment in property and equipment. The Group reduced its total loans and borrowings to RM175.3 million (from RM194.5 million), maintaining a healthy capital structure.

• Operating cash flow: RM42.3 million (FY2025: RM426.0 million)
• Investing cash outflow: RM54.0 million (mainly for property, plant and equipment)
• Financing cash outflow: RM70.2 million (mainly dividends and debt repayment)

Corporate Actions and Capital Management

• Issued 4,411,500 new shares under the ESOS for RM4.7 million cash.
• Repaid RM20 million under the MTN Programme.
• Declared and paid a total dividend of 7 sen per share (1 sen interim, 6 sen special), amounting to RM92.7 million for FY2026.
• As at 31 January 2026, 4,416,400 treasury shares are held, and there are 36.6 million unexercised ESOS options outstanding.

Corporate Proposals & Landbank

• Major Land Sale: On 29 August 2025, a conditional SPA was signed to dispose of freehold vacant land for RM263.21 million (not yet completed as of 20 March 2026 – potentially price sensitive).
• Panoramic Industrial Development Sdn Bhd also has an ongoing SPA for the disposal of land for RM119.83 million.
• Total landbank (including under development): 2,469 acres, including prime projects in Johor, such as Bandar Cemerlang, Nusa Cemerlang Industrial Park, and Tanjung Senibong.
• Upcoming launches include 167 high-end residential units, 18 semi-detached factories (BCIP), and 24 units of affordable homes (total GDV: RM252 million). A major serviced apartment project was also launched in March 2025, with 1,257 units and a GDV of RM1.29 billion.

Litigation

The Group is involved in several ongoing legal proceedings, the most notable being a suit for defamation, malicious falsehood, and conspiracy to injure, with claims amounting to RM51.5 million. The outcome of these litigations has not been determined and could potentially have financial implications for the Group should there be adverse judgments.

Macroeconomic and Strategic Outlook

The management highlighted several risks and opportunities ahead:

• Global economic uncertainties, including trade tensions and the US-Iran conflict, are expected to impact costs and supply chains.
• Positive factors include the July 2025 OPR cut by Bank Negara Malaysia, which should support property demand.
• Government initiatives and FDI inflows into Johor are expected to maintain industrial property demand.
• The Johor-Singapore Special Economic Zone and major infrastructure projects like the RTS Link are expected to boost property values in the region.
• The Group remains cautious, focusing on cost management, prudent development strategies, and leveraging its substantial landbank.

Tax and Dividend

• The effective tax rate was higher than the statutory rate (current year tax RM35.7 million) due to non-deductible expenses.
• No final dividend was declared for FY2026, compared to interim/special dividends declared earlier in the year. This may be seen as a prudent move in light of lower earnings but can also be interpreted as a signal of caution for shareholders.

Key Matters for Shareholders and Potential Price-Sensitive Issues

• Significant Decline in Profitability: The sharp drop in revenue and profit after the one-off land sale in FY2025 is notable and may affect investor sentiment.
• Large Pending Land Sales: The successful completion of the RM263.21 million land sale (and other pending disposals) could provide a major boost to cash flow and earnings in the coming year.
• Ongoing Litigation: The claims and counter-claims in the legal proceedings, with exposure as high as RM51.5 million, are important to monitor for potential downside risk.
• Dividend Policy: The Board’s decision not to declare a final dividend, after a substantial interim/special payout, indicates a more conservative stance possibly due to lower earnings and macroeconomic uncertainties.
• Exposure to Economic and Regulatory Risks: Risks from wage policy, fuel/electricity subsidy rationalisation, and service tax scope expansion are flagged and could impact future profitability.

Conclusion

While Crescendo Corporation Berhad remains fundamentally strong with substantial assets and a large landbank, investors should be aware of the sharp fall in earnings, the Group’s reliance on major land sales, and the impact of ongoing legal proceedings and economic headwinds. The completion of pending land sales and ongoing development launches could provide upside, but macro and execution risks remain.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to conduct their own due diligence and consult with professional advisers before making investment decisions. The writer assumes no responsibility for any actions taken based on the information contained herein.

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