CMS confident of strong growth potential and resilience

The group’s Cement Division, reported a lower PBT of RM39.19 million in 1H18 compared to 1H17’s PBT of RM47.04 million despite an eight per cent increase in its revenue. The lower PBT was mainly due to repair costs from the planned plant maintenance shutdown carried at its clinker plant during the months of January and February this year. This was the first extensive maintenance shutdown exercise carried out by the Group since it took over the plant in 2007.

The division’s performance was further impacted by an increase in the price of imported clinker due to tight supply in the international market which management seeks to mitigate through alternative supply sources.

CMS also noted that the Construction Materials & Trading Division reported a PBT of RM23.41 million for 1H18 which is 21 per cent lower than 1H17’s PBT of RM29.50 million despite a 10 per cent increase in revenue.

“The lower PBT was mainly attributable to a sudden and acute shortage of raw materials supply: quarry aggregates and quarry sand, resulting from a steep spike in the demand for the materials from the Pan Borneo Highway project. Margin was also compressed by the recent increase in prices of bitumen and diesel. The division is actively exploring for alternative supply sources to ensure its continuous production of premix,” it explained.

As for the Construction & Road Maintenance Division, it said, it registered a strong PBT of RM44.76 million, an increase by 24 per cent in comparison to 1H17’s profit of RM36.11 million.

“This was on the back of higher revenue from the construction of Pan Borneo Highway project, the Miri-Marudi road rehabilitation project and the Sarawak Museum project,” it added.

As for its Property Development Division, the group reported a lower PBT of RM11.30 million compared with RM23.57 million for the corresponding period in 2017. This was mainly attributable to lower sales in an increasingly challenging property market.

Overall, Lugun said: “We are confident that CMS will continue to maintain its strong growth potential and will remain resilient in spite of expected continuing headwinds.”