AZRB's 3Q net profit jumps 93% on higher construction jobs progress

KUALA LUMPUR (Nov 29): Ahmad Zaki Resources Bhd (AZRB) saw its net profit jump 93% to RM8.52 million or 1.76 sen per share for the third quarter ended Sept 30, 2016 (3QFY16), from RM4.42 million or 0.92 sen per share in the previous year’s corresponding quarter.

Its revenue for the quarter expanded 53% to RM270.85 million, from RM177.14 million in 3QFY15.

In AZRB’s filing with the bourse, the improvement in revenue was attributed to higher progress of projects under its construction segment, while higher other operating income seen during the quarter had boosted profitability.

Meanwhile, the group saw a significant reversal of taxable temporary differences arising from the write off of unabsorbed losses, following discussions and agreement with local tax authorities in Malaysia.

This, it said, resulted in higher tax expense for the quarter.

Net profit for the cumulative nine-month period (9MFY16) rose 9% to RM18.93 million, from RM17.44 million a year earlier (9MFY15), on the back of 74% growth in revenue to RM844.28 million, from RM485.76 million.

The group said its orderbook stood at RM4.1 billion as at the end of 3QFY16, with the group optimistic to further expand its orderbook, going forward. AZRB said its construction division is expected to register continued strong performance.

“The oil and gas division expects to remain steady, despite the continuing prolongation of weak global oil prices and sentiments. The division also expects increasing contribution from its operations at Tok Bali Supply Base, as the port continues to develop and mature,” it said.

Meanwhile, the group expects its plantation division to see improved fresh fruit bunch (FFB) yields, which may translate into higher revenue ahead. Along with its cost control initiatives in place, the group expects better overall contribution.

For the property development segment, AZRB said it is planning and embarking on several residential developments for launching in 2016 and 2017.

“The property division is currently planning and embarking on several residential development projects for launch in 2016 and 2017. Upon the successful launches of these projects, the property division will be expected to contribute positively to the group. 

“As at the date of this report, the division has development projects with an estimated gross development value of RM1.4 billion,” it said.