KKB records pre-tax profit of RM13.5 million in 3Q21

KUCHING: KKB Engineering Bhd (KKB) has recorded a pre-tax profit (PBT) of RM13.5 million in the third quarter ended September 30, 2021, while the group’s profit attributable to equity holders of the parent amounted to RM9.634 million.

According to KKB’s filing on Bursa Malaysia, the group’s current quarter revenue of RM99.1 million was 15.8 per cent lower as compared to RM117.8 million in the preceding year corresponding quarter, made up of revenue from the Engineering and Manufacturing Sectors of RM93.6 million and RM5.5 million, respectively.

The lower overall revenue for the quarter and year-todate was mainly attributable to lower revenue recognition from the group’s Steel Pipes and Civil Construction divisions although offset by higher revenue from the group’s Steel Fabrication division.

The group recorded a PBT of RM13.5 million in the current quarter (3Q20: RM16.8 million) and year-to-date PBT reached RM31.3 million, compared to RM39.1 million in the first nine months of 2020 (9M20), against a backdrop of lower revenue and lower margin from the group’s Steel Pipes and Civil Construction divisions.

Meanwhile, KKB’s profit attributable to equity holders of the parent was at RM9.634 million for 3Q21, down 12.7 per cent from RM11.036 million in the preceding year corresponding quarter.

Profit attributable to equity holders of the parent for 9M21 was at RM21.629 million, down 2.7 per cent to RM22.219 million in the preceding year corresponding period.

KKB, just like many other businesses, was impacted by the disruptions and restrictions brought about by different stages of Movement Control Orders (MCO) imposed by the Malaysian government since March 2020 as a means of curbing the spread of the Covid-19 virus.

“Inevitably, the MCO has intermittently disrupted our operations but there has been no significant impact on the operating results, cash flow and financial condition of the group,” KKB said.

“Despite this generally uncertain and volatile economic backdrop, the group reported a respectable result for the nine months period ended September 30, 2021.

“The group is determined to build on this momentum and continues its effort to monitor and realign its business plans and strategies to remain robust and competitive.

“The group continues to bid for new contracts to replenish its order book and continuously on the lookout for more collaborations with strategic partners and seek new business opportunities to expand the group’s income stream and sustainability of our core businesses.”

KKB highlighted that while there are on-going concerns on the impact of the Covid19 pandemic, the board expects the group to achieve a satisfactory results in the remaining period of 2021, supported by the existing contracts in hand for the ongoing construction works for Water related projects under the Sarawak Water Supply Grid Programme, major Onshore fabrication jobs for the oil and gas facilities under OceanMight Sdn Bhd and the Sarawak Pan Borneo Highway project (Phase 1 Works Package Contract – WPC-09), barring any other unforeseen circumstances.

“The group endeavours to manage the risk and challenges of uncertainties in the global economic environment.

“The adverse impacts posed by the Covid-19 outbreak, manpower limitations or movements, escalation of costs due to inflationary pressure, volatility of global raw material steel prices and fluctuation of exchange rates are amongst major factors that may impact the group’s performance.”

On another note, KKB also announced that the company proposes to undertake a proposed private placement of up to 12 per cent of the total number of issued shares of KKB to third party investor(s) to be identified at an issue price to be determined in accordance to the general mandate pursuant to Sections 75 and 76 of the Act.

The proposed private placement marks the first equity fund raising by the company since 2001, and the Board believes that this corporate exercise is deemed timely and necessary to fuel KKB and its subsidiaries’ growth ambitions amidst the current recovering economic outlook and the rollout of new infrastructure and construction related projects in Sarawak.

In its filing, the group revealed that the placement size of the proposed private placement of up to 12 per cent of the total issued shares of KKB (as opposed to the full 20 per cent placement Size by December 31, 2021) enables the company to raise the appropriate level of required funds for the operations of the group whilst mitigating shareholder dilution arising from the corporate exercise.

As at November 18, 2021, being the latest practicable date prior to the date of this announcement (LPD), KKB has an issued share capital of RM128,896,000 comprising 257,792,000 shares, with no shares being held as treasury shares.

The proposed private placement will entail an issuance of up to 30,935,040 new KKB shares.