George Kent 4Q net profit falls 65% on lower segmental contribution

KUALA LUMPUR (March 26): George Kent (Malaysia) Bhd’s net profit for the fourth quarter of financial year 2019 (4QFY19) fell 64.81% to RM18.25 million, from RM51.85 million a year earlier, due to lower contribution from its engineering segment.

Revenue for the quarter ended Jan 31, 2019 dropped 33.78% to RM114.5 million, from RM172.92 million previously.

The group said the engineering segment’s quarterly profit fell 47% to RM38.87 million from RM73.98 million, while revenue was down 43% to RM79.64 million from RM139.64 million.

The group also incurred an unrealised foreign exchange (forex) loss of RM680,000, it said in its filing with Bursa Malaysia.

The group has declared a third interim dividend of 3.5 sen per share, payable on April 30.

For the full FY19, net profit fell 31.74% to RM84.92 million, from RM124.4 million in FY18.

Full-year revenue decreased 30.19% to RM430.75 million from RM616.99 million previously.

The group attributed the lower FY19 revenue and net profit to reduced contribution from its engineering segment. However, there was an unrealised forex gain of RM6.64 million.

George Kent chairman Tan Sri Tan Kay Hock said the group’s results are “credible” given the renegotiation, suspension and deferment of the Light Rail Transit 3 project.

“Against this backdrop, the group is committed to delivering on our existing order book and is staying sure and steadfast about implementing its strategic plan to broaden its income base.

“This entails substantial investment of resources, both human and financial, into growing its metering and other water-related businesses and investments. As things stand, demand for water meters has and continues to outstrip supply,” Tan said in a statement.

George Kent said it is continuing its efforts to broaden its income base, in particular by allocating more resources for the expansion of its metering business both within Malaysia and regionally.

The group said its automated meter reading solution is currently undergoing pilot testing and is set for commercialisation later in the year.

It added that it is also on the lookout for opportunities in regional railways, especially through international collaborations with other companies via joint ventures in the regional railway space.

Shares in George Kent closed 2.68% or three sen lower at RM1.09 yesterday, with a market capitalisation of RM630.86 million.

This article first appeared in The Edge Financial Daily, on March 26, 2019.

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