Tasek sees lower revenue, earnings for 2Q16

KUCHING: Tasek Corporation Bhd (Tasek) registered lower revenue and earnings for the second quarter of 2016 (2Q16) ended June 2016.

The company told Bursa Malaysia yesterday that 2Q16 revenue declined by 4.8 per cent year-on-year (y-o-y) to RM173.74 million from RM182.56 million for 2Q15.

Tasek added net profit for 2Q16 dropped by 42 per cent y-o-y to RM17.96 million from RM31.18 million recorded for 2Q15.

Meanwhile, Tasek in its accounts notes filed to the stock exchange explained that the lower revenue for 2Q16 was due to lower average net pricing for both its cement and ready-mixed concrete segments arising from intensive price competition in the market.

As for earnings for 2Q16, Tasek noted apart from lower average net pricing, higher cement production costs and lower interest income also contributed to the lower profit after tax.

Expounding further, Tasek observed that lower share of profit from the group’s associated company also affected the group’s profit for the quarter ended June 2016.

Moreover, Tasek noted its cement segment registered a lower operating profit of RM18.2 million in the current quarter compared with the previous year’s corresponding quarter of RM34.7 million due to lower net pricing arising from the intensive price competition in the domestic market.

In addition, it noted higher production cost due to plant maintenance also affected the segment’s profit for 2Q16.

However, Tasek noted its concrete segment recorded a higher operating profit of RM1.56 million in 2Q16 to the corresponding quarter of RM1.28 million in 2Q15, an improvement of 22 per cent y-o-y.

The group explained that the higher operating profit for 2Q16 was due to lower raw materials and cartage expenses which were sufficient to off-set the lower net pricing arising from the intensive price competition in the readymixed concrete market.

On top of that, Tasek said the group’s interest income of RM2.3 million for 2Q16 was lower compared with RM2.8 million in the previous year’s corresponding quarter due to lesser amount of funds placed on term deposits.

The group’s share of profits from the its associated company in 2Q16 decreased to RM1.04 million from the previous year’s corresponding quarter of RM1.75 million due to lower cement sales in the Sabah market.