CMSB set for improved earnings on rapid job flows

JAYA: Cahya Mata Sarawak Bhd (CMSB), which posted a 71% year-onyear rise in net profit for the fourth quarter ended Dec 31, 2023 (4Q23), is expected to see improvement in earnings this year due to rapid construction job flows in Sarawak.

As the company is the state’s sole cement producer, analysts are upbeat that CMSB stands in a good position to capitalise on the state’s ongoing economic development.

At the moment, they are maintaining their earnings forecasts pending an analyst briefing later.

MIDF Research, which is retaining its “buy” call on CMSB with an unchanged target price of RM1.32, said despite its under performance, it continues to like the group as it remains a key beneficiary of stronger construction job flows in Sarawak, being the state’s sole cement producer.

This is also in line with management’s optimism on leveraging on strong prospects for Sarawak’s economic growth, it added.

The federal government, under Budget 2024, allocated Rm5.8bil for development in Sarawak and Rm7.4bil for the second phase of the Sarawak-sabah Link Road.

Meanwhile, TA Research said it believes the demand for building materials in Sarawak should remain intact, especially towards cement, supported by local infrastructure projects, namely the Kuching Urban Transportation System, Sarawak Sabah Link Road and Baleh Dam.

CMSB, among others, is involved in cement and phosphates manufacturing, oil tools, green technology, construction materials, trading, construction, road maintenance, property development, financial services and telecommunications infrastructure.

The group posted a 71% year-on-year rise in net profit to Rm36.25mil in 4Q23, as its cement segment returned to profitability. Revenue for the quarter rose 7.86% to Rm332.65mil.

For the full year of 2023, net profit was lower at Rm115.13mil compared with Rm287.13mil. Full-year revenue rose by 18.82% to Rm1.2bil, on the back of higher contributions from the cement and oil tools divisions.