Progress at many construction projects were delayed when the Movement Control Order (MCO) was imposed to curb Covid-19 infections but lesser-known construction company Widad Group Bhd still managed to generate steady growth in profitability during the pandemic-hit years of 2020 to 2021.
In fact, the group saw bumper earnings, with FY2021 profit after tax (PAT) coming in at RM70.8 million, more than 17 times higher than the RM4 million booked in FY2020. It was also more than four times the RM15.4 million booked in FY2018 and RM12 million booked in FY2019.
This led to an impressive risk-weighted three-year compound annual growth rate (CAGR) of 66.3% for the period in review, which resulted in the group receiving The Edge Billion Ringgit Club award for the highest growth in PAT in the construction sector.
Widad attributed its growth to the acquisition of Serendah Heights Sdn Bhd (SHSB), which boosted its order book to RM1.5 billion.
The group completed its acquisition of SHSB in March last year. SHSB, through its wholly-owned subsidiary YBK Usahasama Sdn Bhd (YBKU), holds a RM747.5 million, 12-year concession to construct facilities and to carry out asset management services at the Universiti Teknologi Mara (UiTM) campus in Jasin, Melaka.
Despite the weakness in the construction sector in 2020 due to the pandemic, Widad has been actively tendering for construction jobs from both the public and private sectors. According to its 2021 annual report, the group obtained a slew of construction contracts totalling RM559.22 million, including two contracts to upgrade water treatment plants in Sungai Limau and Bukit Selambau in Kedah.
Widad also bagged contracts to construct a new school and other facilities in Selangor, as well as a highway from Kota Baru to Kuala Krai in Kelantan, and a contract to upgrade the road from Klang Container Terminal to North Port.
The group also expanded its geographical reach to Brunei in 2021, through a collaboration agreement with Brunei-based Syarikat Kejuruteraan Setia Abadi Sdn Bhd (SKSASB) to form an unincorporated joint venture (JV). Through the JV, it would execute a contract awarded by Brunei’s Ministry of Defence to SKSASB in relation to the maintenance of the Royal Brunei Naval Base.
Widad expects the construction sector to turn around this year, with growth driven by major infrastructure projects such as the Light Rail Transit Line 3 (LRT3), Mass Rapid Transit Line 3 (MRT3), Johor-Singapore Rapid Transit System (RTS) and Pan Borneo Highway in Sabah and Sarawak.
In 2017, Widad took over the listing status of Ideal Jacobs (M) Corp Bhd via a reverse takeover (RTO) exercise valued at RM520 million in a mix of shares and cash. The RTO triggered a mandatory general offer of 23 sen per share. Consequently, businessman Tan Sri Muhammad Ikmal Opat Abdullah’s private vehicle, Widad Business Group Sdn Bhd, ended up controlling close to 52% of Ideal Jacobs, which is now known as Widad.
Muhammad Ikmal, who hails from Kedah, also controls IT company Dataprep Holdings Bhd, which he took over in 2017 from Datuk Lim Chee Wah, the youngest son of the late Tan Sri Lim Goh Tong, founder of Genting group.
In 2019, Muhammad Ikmal entered the limelight when Widad Business Group made a RM5.3 billion cash offer to take over the North-South Expressway (PLUS) from Khazanah Nasional Bhd and the Employees Provident Fund. But the deal was later shelved. It is worth noting that Widad Group also has a facilities management contract for Istana Negara.
For the six months ended June 30, 2022, Widad’s net profit almost tripled to RM13.82 million from RM4.88 million a year earlier, on the back of higher revenue of RM101.54 million, from RM48.31 million previously. The group attributed the top- and bottom-line growth to the reopening of the economy, which led to more construction work restarting following the lifting of the MCO in the second half of 2021.
“Barring any unforeseen circumstances, for the remainder of financial year 2022, the group is poised to maintain its first half year performance given the outstanding order book worth RM1.43 billion and an ongoing corporate proposal. Additionally, the group is actively assessing and negotiating more acquisitions of strategic businesses that may enhance the group’s income and cash flow,” Widad said in its latest quarterly report.