JAKS Resources’ 2Q earnings more than triple to RM9.83 mil

KUALA LUMPUR (Aug 23): JAKS Resources Bhd’s net profit for the second quarter ended June 30, 2016 (2QFY16) increased by more than three times to RM9.83 million, from RM3.26 million in the corresponding period a year ago, mainly on higher profit from the construction, trading and manufacturing divisions.

Its revenue ballooned by 80% to RM159.1 million in 2QFY16, from RM88.3 million in 2QFY15, contributed mainly by the construction division of RM120.7 million and the property development division of RM33.6 million, following the progress billings achieved, in particular RM48 million from the Vietnam EPC’s construction revenue coming on stream. The trading and manufacturing divisions generated a revenue of RM4.8 million in the quarter under review.

For the six-month period ended June 30, 2016 (1HFY16), the group’s net profit recorded a growth of 72.2% to RM10.9 million, from RM6.33 million in 1HFY15. The group’s revenue also grew by 40.9% to RM281.9 million in 1HFY16, compared with RM200.1 million in 1HFY15.

“With the existing order book in hand on jobs from the domestic market and construction jobs that would be coming on stream from the Vietnam venture, the group’s construction division is expected to perform satisfactorily, as the progress of work moves according to schedule,” it said in a note filed with Bursa Malaysia.

It added that the property market remains challenging, on the back of slower economic momentum due to weaker purchasing sentiment post the goods and services tax, coupled with tighter lending from banks that impacts both sales of commercial and residential units of the property development division.

“Barring any adverse developments, the group will endeavour to achieve satisfactory performance in 2016,” it said.

JAKS Resources’ share price slipped three sen or 2.88% to settle at RM1.01 yesterday, valuing it at RM442.74 million.

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This article first appeared in The Edge Financial Daily, on Aug 23, 2016. Subscribe to The Edge Financial Daily here.