KKB net profit plunges 36.5% to RM7.6m

by **Cals** Fri 08 Aug 2014, 17:28

Business & Markets 2014

Written by Gho Chee Yuan of theedgemalaysia.com

Friday, 08 August 2014 09:31

KUALA LUMPUR: KKB Engineering Bhd (KKB) saw its earnings in the second quarter ended June 30, 2014 (2QFY14) fall 36.5% year-on-year to RM7.6 million from RM11.97 million.

Its revenue also fell 19.34% to RM48.47 million from RM60.09 million in the previous corresponding period. Earnings per share dropped to 2.95 sen from 4.64 sen previously.

KKB told Bursa Malaysia in a filing yesterday that the decline in revenue was due to a substantial shift in the proportion of revenue contribution from the engineering sector of 28% (2QFY13: 66%) to the manufacturing sector of 72% (2QFY13: 34%).

“The engineering sector registered revenue of RM13.7 million compared with RM39.9 million previously in light of the absence of sizeable jobs and projects undertaken during the quarter.

“The construction division recorded a revenue of RM2.3 million (2Q13: RM14.5 million), representing a reduction of RM12.2 million or 84.1%, as a result of lower progress billings from ongoing projects and completion of projects,” it said.

The company also noted that its revenue from the steel fabrication division plunged 58.2% to RM10.4 million compared with RM24.9 million in 2QFY13.

In the manufacturing sector, the company’s revenue from steel pipes manufacturing under subsidiary companies, Harum Bidang Sdn Bhd (HBSB) and KKB Industries (Sabah) Sdn Bhd, doubled to RM15.8 million (101.9%) with an aggregate revenue of RM31.3 million compared with RM15.5 million in the corresponding year.

“The increase in revenue is mainly attributed to the sales of polyurethane-lined mild steel pipes by HBSB,” it explained.

For the second half (2HFY14) outlook, the group said it will be challenging.

“We are cautious about the continued uncertainties in the global economic environment, escalation of costs due to inflationary pressure, volatility of global raw material and steel prices and fluctuation of exchange rates which may impact the group’s performance.

“The group [will] continue to explore all opportunities available in our specialised and growing structural steel engineering services with more focus given to the energy-related projects,” it said.

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