Ahmad Zaki's 2Q profit jumps 2.6 times with concession income, lower plantation losses

KUALA LUMPUR (Aug 29): Income generated by its facilities management concession of IIUM Medical Centre, together with narrower losses from its plantation division, drove Ahmad Zaki Resources Bhd's net profit up 2.6 times in the second quarter ended June 30, 2017 (2QFY17) to RM15.84 million from RM6.21 million a year ago.

However, quarterly revenue dropped 10% to RM237.48 million from RM264.05 million a year ago, no thanks to lower contribution from its construction division, though it was mitigated by higher topline at its property, oil and gas, and plantation divisions.

Despite lower construction earnings, Ahmad Zaki said the segment's outstanding orderbook stood at RM3.5 billion, which is expected to provide earnings visibility for the next four years.

For the cumulative six months (1HFY17), Ahmad Zaki said net profit doubled to RM21.95 million from RM10.41 million a year ago, though revenue dropped 14.96% to RM487.67 million from RM573.42 million.

Ahmad Zaki group managing director Datuk Seri Wan Zakariah Wan Muda said its effort of balancing project-based income with income generated through recurring sources are now "bearing fruit".

"We will continue to implement the growth strategy of increasing our construction orderbook and turning around the plantation division. In addition, we aim to further enhance our recurring revenue stream such as our captive market in the supply bases we operate in East Coast of Peninsular Malaysia, as well as future tolling income from the East Klang Valley Expressway (EKVE) concession," Wan Zakariah added.

On future prospects, Wan Zakariah said: "At our construction division level, we remain optimistic of the prospects of getting new projects. With many infrastructure projects yet to be tendered, we will continue to aggressively bid for them, taking advantage of the expertise and track record we have built up over the years."

"With respect to our other divisions, the plans that we have put in place are coming along nicely and have started showing results. Nevertheless, we will continue to enhance our operations to increase efficiency and better the group's profitability," he added. — theedgemarkets.com

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