KKB profits and revenue fall steeply in 1Q14

by **Cals** Thu 08 May 2014, 19:11

Business & Markets 2014

Written by Yen Ne Foo of theedgemalaysia.com

Thursday, 08 May 2014 10:08

KUALA LUMPUR: KKB Engineering Bhd (KKB), a Sarawak-based steel products manufacturer, saw a steep fall of 66.7% in its profits to RM42.6 million while its revenue dropped 33.7% to RM42.6 for the first quarter ended March 31, 2014.

KKB attributed the poor results to lower revenue contribution from its engineering sector. “The engineering sector’s revenue of RM21.2 million (against RM49.1 million a year ago) was 56.8% lower, as a result of lower progress billings from ongoing projects and completion of projects by the civil construction division.”

The steel manufacturer’s basic earnings per share fell to 1.47 sen from 4.41 sen a year ago.

The company’s steel fabrication division, too, saw revenue falling by 44.6% to RM19.5 million while the hot-dip galvanising division offered better results with a 32.3% increase in revenue.

Nonetheless, for its manufacturing sector, revenue from steel pipes manufacturing under KKB’s subsidiaries, Harum Bidang Sdn Bhd and KKB Industries (Sabah) Sdn Bhd brought higher revenue of RM16.5 million or a 37.5% increase compared to the same quarter last year.

Positive news also came from the LPG cylinders manufacturing division which rebounded strongly to register RM4.9 million in revenue, a 58% improvement from last year. This was due to higher demand from petroleum companies as well as KKB’s supply to Mygaz Sdn Bhd.

Despite poorer results for the quarter under review, KKB is optimistic that it will have a “favourable performance” in 2014 now that the expansion and modernisation of its fabrication yard in Kuching has been completed.

But it remains mindful that factors such as continued uncertainties in the global economic environment, escalation of costs due to inflationary pressure, volatility of global raw material prices and fluctuation of exchange rates will impact the company’s performance.

This article first appeared in The Edge Financial Daily, on May 8, 2014.