KUCHING: Quality Concrete Holdings Bhd’s construction & property development segment has more than doubled its revenue in first quarter ended April 30, 2019 (Q1-2019).
The segment’s turnover surged to about RM8.1 million from RM3.54 million in Q1-2018.
Quality Concrete attributed the improved performance to the segment having achieved better progress in its on-going infrastructure projects.
The company has two infrastructure projects in hand with an order book of RM116 million to be completed in three years.
In Q1-2019, group revenue rose to about RM30.5 million from RM26.4 million in Q1-2018 which helped narrow group pre-tax loss to RM1.68 million from RM2.1 million during the same period.
Loss per share dipped to 2.52 sen from 3.46 sen.
The manufacturing segment contributed the bulk of RM21.95 million to group revenue and improved slightly from RM21.22 million in Q1-2018. The trading segment chipped in RM5.32 million against RM5.73 million during the same period.
Under the manufacturing segment are three business divisions — ready-mixed concrete, pipes and timber.
Quality Concrete operates eight ready-mix concrete batching plants statewide, offering various grades of ready-mixed concrete and concrete piles to the government’s infrastructure projects and commercial developments.
The company also produces high density polyethylene pipes commonly used for water reticulation as well as for underground power and telecommunication cable protection.
The timber division produces sawn timber for the export market, and other downstream timber products, such as doors and wooden flooring.
The group is also into quarry operation.
Quality Concrete said the manufacturing segment had recorded higher revenue due to higher contribution from the pipe division as the Sarawak government has rolled out various water infrastructure projects.
As these projects are in their initial stages, the revenue of the pipe division has increased only marginally of RM600,000.
“The ready-mix concrete division has seen its revenue dropped by RM0.3 million owing to the lacklustre property market and fierce competition among other suppliers,” Quality Concrete said in notes accompanying its latest quarterly results.
On the reduction in group’s pre-tax loss, he company said the losses incurred by the manufacturing segment were reduced by about RM300,000.
“The escalating trade war between United States and China has caused a slowdown in world economy, thus resulting in lower cost of imported materials, which helps to improve the profit margin.
“The profit before tax of the construction & property development segment has also seen improvement in the current quarter at RM0.3 million as compared to RM0.2 million in the corresponding quarter in tandem with the increase in the revenue of the segment.”
On the prospects of the current financial year ending Jan 31, 2020, Quality Concrete expects the market to continue posing a big challenge to the construction industry.
“The management is mindful of the challenges ahead and is taking measures to improve the performance of the group, and ensure better efficiency.
“Externally, we will continue to seek new opportunities to secure more revenues while internally (to implement ) cost cutting and streamlining the operation to achieve better outputs and efficiency.
“The management will continue to be prudent in our approach to ensure the group is in a strong footing to meet the challenges,” it added.
