Jati Tinggi Group Berhad Delivers Strong Revenue and Profit Growth in Q1 2026

Key Highlights from the Q1 2026 Unaudited Interim Financial Report

• Revenue Soars: Group revenue surged to RM74.44 million for Q1 2026, a significant increase of 198.38% from RM24.95 million in Q1 2025.
• Profitability Up Sharply: Profit before tax nearly doubled to RM2.17 million (up 93.58%), while profit after tax reached RM1.61 million (up 97.07%).
• Main Revenue Driver: The bulk of revenue (98.01%) was contributed by the provision of underground utilities engineering services and solutions.
• Order Book Strengthened: New contracts secured from December 2025 to April 2026 total approximately RM197 million, bringing the outstanding order book to about RM770 million, ensuring earnings visibility for the next 2-3 years.
• Strategic Acquisition: Completion of a 51% equity acquisition in Roflex Pipe Sdn Bhd, which is now a subsidiary and may provide new growth avenues.
• Strong Cash Position: Cash and cash equivalents stood at RM55.14 million at Q1 end, despite a RM9.99 million net outflow during the quarter.
• ESOS & Private Placement: Employees’ Share Option Scheme (ESOS) and a completed private placement providing fresh working capital support and staff incentive alignment.
• No Dividend Declared: No dividends proposed or declared for the quarter.
• Performance Guarantee Exposure: Notable contingent liability of RM45.13 million related to performance guarantees extended to third parties.

Detailed Financial Performance Review

Revenue and Profit Trends

Jati Tinggi Group Berhad recorded a robust financial performance for the quarter ended 28 February 2026. Revenue grew by RM49.49 million year-on-year, largely driven by higher project execution in the underground utilities engineering segment. Key projects included:

• Installation and commissioning of 33kV submarine cables at Sungai Manjung, Lumut, Perak
• 132kV double circuit underground cable installation in Kuala Lumpur
• 275kV bulk supply connections to data centres in Johor and Selangor
• 132kV circuit works at Cyberjaya

Gross profit improved to RM5.53 million (up from RM3.39 million in Q1 2025), with net profit after tax rising to RM1.61 million. This growth is attributed to higher revenue recognition and effective cost management.

Comparison to Previous Quarter

While Q1 2026 revenue (RM74.44 million) was lower than the preceding quarter (RM84.85 million), due mainly to project timing and lower contributions from major data centre supply projects, the results remain strong and within expectations, reflecting the cyclical nature of project-based businesses.

Profit before tax for Q1 2026 was RM2.17 million, down from RM5.83 million in the previous quarter, due to higher project completion and revenue recognition in the earlier period.

Balance Sheet and Cash Flow

The Group remains in a stable financial position with total assets of RM206.58 million and equity of RM99.75 million. Net assets per share improved to RM0.23. Cash and cash equivalents at end-quarter were RM55.14 million, with a decrease primarily due to increased fixed deposits pledged and loan repayments.

Borrowings remain at manageable levels (RM44.34 million), all denominated in Ringgit Malaysia and secured, with a mix of trade financing, banker’s acceptances, and term loans. Performance guarantee liabilities, common in the construction sector, are noted at RM45.13 million.

Corporate Developments & Strategic Moves

• Acquisition of Roflex Pipe Sdn Bhd: On 10 April 2026, the completion of a 51% equity stake in Roflex marks a significant expansion, positioning the Group for potential new revenue streams and market opportunities.
• Private Placement: The Group completed a private placement of 39.18 million shares, raising RM19.98 million for working capital and expenses, further strengthening liquidity.
• Employees’ Share Option Scheme: ESOS is in full force, with 5 million options exercised at RM0.30/share and further grants at RM0.61/share, aligning employee incentives with shareholder interests.
• Order Book and New Projects: Notably, the Group secured a RM79.86 million contract from Tenaga Nasional Bhd for double circuit underground cables to a data centre in Johor. The order book of RM770 million provides clear earnings visibility and underpins future growth.

Prospects and Sectoral Outlook

The outlook for the construction and engineering sector in Malaysia remains positive. GDP growth is projected at 4-5% for 2026, with the construction sector expected to grow by 9.1%, underpinned by ongoing infrastructure, industrial, and data centre projects. The Group is well-positioned to benefit from sustained investment in power infrastructure and national energy transition projects, as well as government spending on public infrastructure and data centre expansion.

Management expresses optimism for the coming quarters, supported by a strong order book and sector fundamentals. No dividends have been declared for the quarter, which may be viewed as a move to conserve cash for growth and project execution.

Other Notable Points for Shareholders

• No Material Litigation: The Group is not involved in any material litigation as of the reporting date.
• No Dividend Declared or Proposed: Investors should note the absence of dividends for this quarter.
• Price-Sensitive Events: The acquisition of Roflex Pipe Sdn Bhd, a substantial order book, and new project wins may be price sensitive and could drive share price re-ratings. The completion of the private placement and ESOS exercises also increase the share base and provide additional working capital for future growth.
• Key Risks: Ongoing exposure to performance guarantees and the cyclical nature of large project execution should be considered by investors.

Conclusion

Jati Tinggi Group Berhad’s Q1 2026 results point to strong momentum in revenue and profit growth, a robust project pipeline, and a strengthened balance sheet. The Group’s strategic expansion, order book strength, and positive sector outlook make it a company to watch for investors seeking exposure to Malaysia’s infrastructure and utilities growth.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should perform their own due diligence or consult a licensed financial adviser before making investment decisions. The author and publisher assume no responsibility for actions taken based on the information herein.

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