Strong cement demand lifts Tasek Corp 2Q profit by 42.5%

by **Cals** Thu 07 Aug 2014, 00:50

Business & Markets 2014

Written by Charlotte Chong of theedgemalaysia.com

Wednesday, 06 August 2014 09:41

KUALA LUMPUR: Tasek Corp Bhd announced a net profit of RM31.1 million in its second quarter ended June 30, 2014 (2QFY14), an increase of 42.5% from RM21.82 million in the same quarter last year.

Tasek Corp has declared a dividend of 40 sen, to be paid on Sept 9 this year, which was eight sen higher compared with 32 sen in the corresponding quarter last year.

The cement maker’s revenue came in 20.78% higher at RM171.5 million, compared with RM142 million a year earlier. Earnings per share expanded to 25.6 sen, from 17.96 sen earlier.

In an announcement to Bursa Malaysia yesterday, Tasek Corp said the higher revenue was mainly due to higher demand for cement locally.

“However, profit after tax for the quarter under review was partially affected by lower share of profit from the group’s associated company and lower interest income.”

Although its cement segment achieved higher operating profit on the back of higher sales revenue, its concrete segment recorded an operating loss of RM7,000 in 2QFY14, compared to a profit of RM761,000 in 2QFY13.

It explained in the same note that the loss was mainly due to lower sales revenue arising from a reduction in concrete sales volume, which was partly offset by higher average selling prices.

“Sales volume was adversely affected by the closure of the Subang site plant [at the] end of August last year, while the segment’s profitability was also affected by rising costs of production relating to higher costs of aggregate and sand materials during 2QFY14, compared with the corresponding quarter of the previous year.”

For the six months ended June 30, its net profit climbed 28.7% year-on-year to RM56.02 million, from RM43.53 million in the same period in 2013. Revenue grew 20.25% to RM334.4 million, from RM278.09 million earlier.

It noted that the group’s performance is expected to “continue to be positive” in 3QFY14.

“The ongoing government projects under the Economic Transformation Programme such as the MRT (mass rapid transit) and LRT (light rail transit) line extension projects, are expected to continue to lead the construction sector’s growth in the remaining months of 2014,” it added.

This article first appeared in The Edge Financial Daily, on August 6, 2014.