VARIA ANNOUNCES SUBSTANTIAL GROWTH IN REVENUE BY 694% TO RM233.2 MILLION IN FY2024

Strong Performance Driven by PTM Despite Historical Challenges and Amortisation

KUALA LUMPUR, 29 AUGUST 2024 – Varia Berhad ("Varia" or the "Group"), an experienced player in the field of construction and property development, is pleased to announce its financial results for the fifth quarter of the financial year 2024 ("Q5 FY2024") and the fifteen-month period ended 30 June 2024 ("FY2024"). This reporting period follows the Group’s decision to change its financial year-end to 30 June.

For Q5 FY2024, Varia recorded a revenue of RM84.9 million, reflecting a 29% increase from the RM65.8 million reported in the preceding quarter ("Q4 FY2024"). The Group’s gross profit also saw an uplift, rising by 25% to RM9.58 million from RM7.69 million in Q4 FY2024. Despite these gains, the Group experienced a Loss Before Tax (“LBT”) of RM7.2 million, which contrasts with the Profit Before Tax (“PBT”) of RM2.0 million achieved in the fourth quarter. The loss was primarily driven by the amortisation of intangible assets, a historical issue arising from the acquisition of Pembinaan Teguh Maju Sdn. Bhd. ("PTM"), alongside increased financing costs during the quarter.

In a Year-over-Year (YoY) comparison, Varia recorded RM84.9 million in revenue for the current quarter, representing a significant 325% growth compared to RM19.9 million in the previous corresponding quarter. This remarkable increase in revenue was largely driven by the newly acquired subsidiary, PTM, which has been instrumental in enhancing the Group's financial performance. However, the Group was impacted by a one-off amortisation exercise related to the acquisition of PTM, leading to a net deferred tax charge on intangible assets amounting to RM8.0 million. This, combined with higher financing costs in the current quarter, resulted in a LBT of RM7.2 million.

Over the fifteen-month period ended 30 June 2024, Varia Berhad achieved a total revenue of RM233.2 million, representing a substantial increase of 694% compared to RM29.4 million in the corresponding twelve-month period ended 31 March 2023 (“FY2023”). This remarkable growth was largely attributed to the contributions from PTM, which played a central role in driving the Group's financial performance. The Group's Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) for the period stood at RM18.3 million, a significant recovery from a loss of RM8.8 million in the previous financial year, while PBT reached RM1.2 million, compared to a lLBT of RM10.81 million in the previous year.

The construction segment remains the primary revenue generator for Varia, with PTM leading the charge by contributing RM231.7 million to the Group's total revenue during the fifteen-month period. Notable contributions came from key projects such as Perkeso, Pulau Indah, and Taiga, which reported gross profits of RM4.9 million, RM3.2 million, and RM0.8 million respectively. The property development segment also demonstrated positive progress, with the Taman Arowana Phase 1 project generating RM1.4 million in revenue.

Datuk Benson Lau, Managing Director of Varia, commented, "The results for this extended reporting period highlight the resilience and strength of our core operations, particularly the significant contributions from PTM. Despite the challenges posed by past issues related to the amortisation of intangible assets, our solid revenue growth and improved EBITDA underscore our ability to navigate these obstacles effectively. With a strong order book exceeding RM2.24 billion as of 27 August 2024, we are well-positioned to continue our growth trajectory. We remain focused on securing high-value contracts, driving operational efficiencies, and delivering robust results to our stakeholders."

Looking ahead, Varia Berhad remains cautiously optimistic on its future growth prospects. The Group has secured over a billion ringgit in new contracts for the past month, including significant projects such as the RM555.0 million "Projek Menaiktaraf Loji Rawatan Kumbahan Serantau" in Penang and the RM61.5 million contract for the construction of educational facilities at Universiti Pendidikan Sultan Idris, Tanjong Malim, Perak. Additionally, Varia's recent award of the RM410.3 million "Rancangan Tebatan Banjir Sungai Muar" project in Johor further strengthens its infrastructure portfolio. These strategic wins are expected to contribute positively to the Group's financial performance in the coming years.

Varia Berhad will continue to focus on securing high-value contracts and driving operational efficiencies to deliver strong results for its stakeholders.