LB Aluminium Berhad Reports Strong Earnings Growth in Q3 2026

Key Highlights

• Profit after Tax Doubles: The Group posted a net profit of RM34.85 million for Q3 2026, up 65.3% from RM21.08 million in Q3 2025.
• Significant Margin Expansion: Profit before tax soared by 50.5% to RM44.41 million versus RM29.51 million a year ago, mainly due to improved margins in both aluminium and property segments.
• Property Segment Drives Growth: Property segment profit before tax jumped 62.2% to RM33.53 million, buoyed by strong contributions from PSV 1 Residences and PSV 2 Residences projects.
• Aluminium Segment Resilient: Aluminium segment profit before tax increased 23.2% to RM10.88 million, attributed to higher margins despite revenue declining 0.7% year-on-year due to lower sales volume.
• Revenue Growth: Group revenue grew to RM270.17 million (Q3 2025: RM253.68 million). The property segment posted a robust 19.2% revenue increase, while the aluminium segment saw a minor decrease.
• Balance Sheet Strength: Net assets per share rose to RM1.10, up from RM1.00 as at 30 April 2025. Cash and cash equivalents more than doubled to RM104.82 million, indicating strong liquidity.
• Dividend Paid: A final single-tier dividend of 2.50 sen per share was paid in October 2025, totaling RM10.87 million.
• Completion of Property Acquisition: The Group completed the acquisition of a leasehold industrial property for RM22 million in October 2025, of which RM4 million was offset against outstanding debt. The property is now rented to a related company, potentially contributing to future income.

Detailed Segmental Performance

Aluminium Segment

• Revenue for the quarter: RM161.06 million (Q3 2025: RM162.18 million).
• Profit from operations: RM11.07 million (up 26.6%).
• Profit before tax: RM10.88 million (up 23.2%).
• Improved margins and reversal of impairment losses on trade receivables (RM186,000 in Q3 2026 vs RM3.79 million impairment in Q2 2026).
• Lower foreign exchange losses compared to previous quarters.
• Aluminium prices remain volatile, affecting raw material costs; a stronger MYR against USD offset some cost increases but reduced export revenue. Management will monitor pricing and costs closely.

Property Segment

• Revenue for the quarter: RM109.11 million (Q3 2025: RM91.50 million).
• Profit from operations: RM34.16 million (up 51.7%).
• Profit before tax: RM33.53 million (up 62.2%).
• Growth driven by Platinum South Valley projects (SASaR, PSV 1 Residences, PSV 2 Residences).
• Cumulative sales and work progress as of 31 January 2026:
  • SASaR: 100% sales, 100% work progress (vacant possession started December 2025).
  • PSV 1 Residences: 89.4% sales, 95% work progress.
  • PSV 2 Residences: 60.3% sales, 60.9% work progress.
• These projects are expected to continue contributing positively to earnings.

Financial Position and Liquidity

• Total assets increased to RM1.09 billion.
• Total equity rose to RM544.15 million from RM462.66 million, reflecting strong profit growth and retained earnings.
• Cash and cash equivalents surged to RM104.82 million, supporting future expansion and dividend payments.
• Borrowings decreased to RM222.60 million from RM242.70 million, improving gearing and reducing finance costs.
• Capital commitments for property, plant and equipment: RM6.88 million contracted but not provided for as at 31 January 2026.

Price Sensitive and Shareholder-Relevant Information

• Strong Earnings Growth: The doubling of net profit and significant margin expansion are likely to positively impact share price and investor sentiment.
• Completion of Property Acquisition: The acquisition and subsequent leasing arrangement could enhance income and asset base, providing long-term value.
• Dividend Policy: The payment of a substantial dividend signals confidence in the Group’s cash flow and profitability.
• Liquidity and Gearing Improvements: Higher cash balances and lower borrowings improve financial resilience, potentially supporting future dividends or growth initiatives.
• No New Corporate Proposals or Material Litigation: Stability with no unresolved major corporate actions or litigation issues.
• Prospects: Management remains cautiously optimistic about profitability in the upcoming quarter, with ongoing contributions from property projects and margin management in aluminium operations.

Risks and Outlook

• Global aluminium price volatility and foreign exchange fluctuations remain key risks, impacting raw material costs and export revenues.
• Malaysian economy expected to grow 4.0–4.5% in 2026; strong household spending and exports are positive drivers, but uncertainties in global trade and commodity prices could pose challenges.
• All major property projects are progressing well and should continue to underpin earnings.
• Board remains cautiously optimistic of continued profitability barring unforeseen circumstances.

Related Party Transactions

• Significant related party transactions in the quarter: RM14.79 million (Q3 2025: RM20.80 million) mainly for purchase and tolling services of aluminium billets, and rental of premises.
• All transactions were conducted at arm’s length and in the ordinary course of business.

Conclusion

LB Aluminium Berhad’s strong earnings momentum, improved liquidity, ongoing property project contributions, and prudent financial management position the Group well for future growth. The completed property acquisition and robust dividend payout further enhance shareholder value. Investors should monitor aluminium price trends, currency movements, and property project milestones closely for potential share price catalysts.

Disclaimer: This article is based on the unaudited financial statements and management commentary for the period ended 31 January 2026. It does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making any investment decisions.

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