JBB BUILDERS (01903) Issues Profit Warning, Expects Annual Loss Attributable to Shareholders of Not More Than RM1 Million, Turning from Profit to Loss Year-on-Year

JBB BUILDERS (01903) has announced that the Group expects to record a loss attributable to owners of the Company of not more than RM1 million for the year ended 30 June 2026, as compared to a profit attributable to owners of the Company of approximately RM1.3 million for the year ended 30 June 2025. Based on the information currently available to the Company, the Board considers that the expected loss is primarily attributable to the combined effect of the following factors: Revenue for the year ended 30 June 2026 decreased as compared to the year ended 30 June 2025, which was due to: (i) a decrease in the total volume of sand and gravel transported under the Singapore offshore transportation contract, resulting in lower overall delivery volume, caused by operational challenges arising from shallow water depth and extremely limited space at the construction site, as well as the suspension of a contract for approximately 1.5 months due to an investigation by the competent authority into an external incident; (ii) a slowdown in project progress affected by rising fuel prices and fuel supply shortages, resulting in a decrease in revenue from land reclamation and related works and offshore transportation business; and (iii) the completion of certain contracts which had contributed part of the revenue for the year ended 30 June 2025, although this impact was partially offset by an increase in work performed under building and infrastructure engineering contracts; Gross profit for the year ended 30 June 2026 decreased as compared to the year ended 30 June 2025, primarily due to the aforementioned decrease in revenue and unbudgeted additional costs incurred on ongoing projects; Other income for the year ended 30 June 2026 decreased as compared to the year ended 30 June 2025, primarily due to: (i) a decrease in the number of voyages and unit prices during the year ended 30 June 2026, resulting in reduced income from subcontractors and suppliers for arranging offshore transportation-related activities in the site area; (ii) a decrease in time deposits placed with banks, resulting in a decrease in interest income from deposits placed with banks in Malaysia by the Group during the year ended 30 June 2026; and (iii) a decrease in interest income on trade receivables from a customer; For the year ended 30 June 2026, the provision for expected credit losses on trade receivables and contract assets decreased, primarily due to the net effect of a decrease in revenue and improved collection resulting in lower balances of trade receivables and contract assets as compared to the year ended 30 June 2025, as well as the inability of certain customers to fulfill installment repayment plans. Accordingly, a reversal of impairment loss on trade receivables and contract assets was recognized for the year ended 30 June 2026, whereas an impairment loss on trade receivables and contract assets was recognized for the year ended 30 June 2025; and General and administrative expenses for the year ended 30 June 2026 increased as compared to the year ended 30 June 2025, primarily due to: (i) an increase in professional fees paid in connection with the potential acquisition of a company established under the laws of the People's Republic of China; (ii) an increase in bank charges; (iii) an increase in employee salaries and related retirement benefits; and (iv) a decrease in stamp duty and commission arising from the disposal of a deposit paid for the acquisition of an investment property.