Cahya Mata Sarawak Bhd (CMS) delivered a stronger financial performance in the first quarter ended March 31, 2026, supported by robust infrastructure activity across Sarawak and a significant turnaround in its property development division. Group revenue increased 13.1% year-on-year to RM278.5 million, while profit before tax (PBT) rose 27.2% to RM34.2 million.
Despite the stronger operating performance, net profit attributable to shareholders slipped 5% to RM24.1 million due to the absence of a one-off RM7.3 million tax credit adjustment that had boosted earnings in the corresponding quarter last year.
A key highlight of the quarter was the sharp recovery in the property development segment. Revenue surged 341% to RM37.3 million from RM8.5 million previously, while the division returned to profitability with a PBT of RM4.7 million compared with a loss before tax of RM1.3 million a year earlier.
The improvement was mainly driven by revenue recognition from the RM550 million Borneo Convention Centre Kuching 2 (BCCK2) project, ongoing construction progress at Cahya Intan Phase 2, and sales of completed properties. BCCK2, a strategic Sarawak government project aimed at strengthening the state’s position as a destination for international conventions and exhibitions, remains on schedule for completion by March 2028.
CMS’s cement division continued to be the group's largest earnings contributor, benefiting from strong infrastructure demand. Revenue rose 12.5% to RM161.1 million, while PBT increased 11% to RM41 million, supported by higher sales volumes, strategic price adjustments and lower production costs.
The construction materials and trading division also recorded exceptional growth, with revenue jumping 192.5% to RM34.6 million due to increased trading activity.
Meanwhile, the road maintenance division remained stable. Revenue eased slightly to RM41.3 million from RM42.6 million as fewer instructed works were completed during the quarter, but profitability remained resilient with PBT holding steady at RM7.1 million.
The oiltools division was the weakest performer during the quarter. Revenue fell 45.7% to RM23.5 million, while the segment recorded a loss before tax of RM1.2 million compared with a PBT of RM4.2 million a year ago. The decline was attributed to completed contracts and lower rig activity across its operating markets.
From a balance sheet perspective, CMS maintained a strong financial position with cash and bank balances of RM585.5 million exceeding total borrowings of RM224.1 million as at March 31, 2026. The group remained in a net cash position with a low gearing ratio of 0.08 times, while net assets per share improved to RM3.19 from RM3.16 at the end of 2025. No dividend was declared for the quarter.
Looking ahead, CMS is monitoring cost pressures arising from geopolitical tensions in the Middle East, which have contributed to higher raw material, logistics and diesel costs. The group is implementing mitigation measures to manage these challenges and safeguard profit margins.
Several major projects are expected to support future growth. These include the ongoing development of Mambong Clinker Line 2, which is targeted for commercial rollout in 2027, and the phosphates division’s yellow phosphorus project, with commercial production scheduled to commence in September 2026 following the successful commissioning of its first two furnaces earlier this year.
What I Learned
CMS’s first-quarter results demonstrate how Sarawak’s infrastructure expansion continues to create opportunities across multiple business segments. While the cement division remains the main earnings driver, the return to profitability in the property development division is particularly noteworthy. Progress on BCCK2 and Cahya Intan Phase 2 has transformed the segment from a loss-making operation into a meaningful contributor to group earnings. Combined with its strong net cash position and upcoming industrial projects, CMS appears well positioned to benefit from Sarawak’s long-term economic and infrastructure development agenda.
Yao Mu Realty, based in Kuala Lumpur, Malaysia, specializes in industrial real estate for factories and land, delivering professional and efficient solutions.
Posted by Yao Mu Realty Sdn Bhd on 26 May 26
Malaysia