KUCHING: KKB Engineering Bhd has more than doubled its group revenue to RM150.3 million in first quarter ended March 31, 2024 (1Q2024) from RM60.5 million a year ago, thanks to the strong performance of the steel fabrication business.
The higher revenue drove group pre-tax profit to RM13.3 million (1Q2023: RM5.57 million). Group net profit improved marginally to RM3.76 million (RM3.4 million). Earnings per share increased to 1.3 sen from 1.18 sen.
In the current quarter under review, KKB derived RM141.9
million group revenue from its engineering sector while the manufacturing sector chipped in RM8.45 million.
“Current quarter’s consolidated revenue of RM150.3 million rebounded strongly by 148.5% as compared to the preceding year corresponding quarter of RM60.5 million, mainly attributed to the strong performance of the group’s steel fabrication division within the engineering sector,” KKB said in its financial results.
The engineering sector saw its revenue surged to RM141.9 million (1Q2023: RM58.7 million) as a result of higher progress billings from on-going projects for the steel fabrication division. The sector’s revenue contributed about 94 per cent to the group’s total revenue for the current quarter, and its gross profit soared 73 per cent to reach RM21.8 million (RM12.6 million).
The steel fabrication division revenue jumped by 330.3 per cent to RM105 million (RM24.4 million), and the sales was mainly from the engineering, procurement and construction (EPC) of standard wellhead platforms for MLNG FaS (F27, F22, Selasih and F23 Brownfield), EPC of flare platform for Kasawari gas development project, module fabrication and supply of steel structures for the Malaysia Rosmari & Majoram offshore gas plant project in Bintulu as well as piles fabrication for SK408W Jerun A CPP jacket and other miscellaneous fabrication works.
Hot dip galvanising division revenue remained low as sales was mostly from ad-hoc walk-in customers.
Under the civil construction division, it posted higher revenue of RM36.5 million (RM33.7 million), generated mostly from the Pan Borneo Highway project undertaken by subsidiary firm KKBWCT Joint Venture Sdn Bhd. Revenue construction from water-related construction projects is minimal as these are mostly reaching their tail end of completion.
On the performance of the manufacturing sector, KKB said its revenue in 1Q2024 climbed 373 per cent to RM8.5 million (RM1.8 million), contributed mainly by the steel pipe manufacturing division which generated higher sales of RM5.4 million (RM29,000), with the sales mainly from the export of mild steel pipes to Brunei from KKB Industries (Sabah) Sdn Bhd and from other ad-hoc customers.
The LP gas (LPG) cylinder manufacturing division also performed better, with increase in revenue of 72.2 per cent to RM3.1 million (RM1.8 million) as a result of higher offtake of new LPG cylinders. About 71 per cent of the current quarter sales was from the supply of new LPG cylinders and the remaining contribution from reconditioning/requalification of LPG cylinders and sales of LPG compact valves to petroleum companies.
In comparison to the financial results in the immediate preceding quarter (4Q2023), KKB posted a slight improvement in group net profit to RM3.76 million (RM3.61 million) despite decrease in revenue to RM150.3 million (RM166.1 million) or by 9.5 per cent.
Commenting on prospects going forward, KKB said it expects the engineering sector to continue its path in generating profit for the group.
“The recent orders secured in May 2024 for the supply of mild steel concrete line (MSCL) pipes and fittings to Perbena Emas Sdn Bhd and award for LPG cylinder fabrication and maintenance from PETRONAS Dagangan Bhd is also expected to contribute positively to the group’s performance, particularly the manufacturing sector, moving forward.
“Supported by the existing contracts in hand and the on-going major onshore fabrication job for the oil & gas facilities, the board and management anticipate the group’s performance for the financial year ending 2024 will remain satisfactory, barring any unforeseen circumstances,” it added.
