KUALA LUMPUR (May 31): Ahmad Zaki Resources Bhd's (AZRB) net profit rose 49.3% to RM9.13 million in the first quarter ended March 31, 2018 (1QFY18) from RM6.12 million a year ago, mainly due to higher income contribution from the concession and property divisions coupled with lower losses from the plantation and oil and gas (O&G) divisions.

This resulted in higher earnings per share of 1.72 sen for 1QFY18 compared with 1.26 sen for 1QFY17.

Quarterly revenue increased 21.6% to RM304.14 million from RM250.19 million a year ago, on improved operations across all divisions, mainly plantation, property and O&G.

On prospects, AZRB said recently, construction stocks faced knee-jerk sell down post-14th general election (GE14) and the sector outlook has been downgraded with uncertainties on the infrastructure project with foreign participation, tender, procurement and job awards moving forward.

"Nevertheless, we believe that the ongoing projects within the group will be completed as [scheduled] and the group will continue to participate in any potential infrastructure project for job replenishment," it added.

"The O&G sector, while still challenging, has shown signs of improvement as the price of crude oil has seen a steady increase during the recent months and currently sustained above US$60 per barrel. From a pure bunkering operator out of Kemaman Supply Base, the division's prospects are positive with the inclusion of Tok Bali Supply Base (TBSB) as a full-fledged supply base in the east coast of Peninsular Malaysia.

"Going forward, the group intends to continue to invest and install more facilities to better accommodate current customers as well as to attract more customers to set up their base of operations at TBSB," said AZRB.

As for its plantation division, AZRB said from the planted palms of 9,579ha currently, 56% of them will be matured palms, thus increasing the acreage yield and generating higher revenue for the group going forward.

"The group is excited to see its new planting from 2011 come into maturity in the coming months. We also look forward to recovering yields from our existing plantation, and that of neighbouring plantations, which will bode well for our mill production in the coming months," it added.

"The property division will continue to focus on its ongoing development namely Puncak Temala in Marang as well as industrial park and residential development in Paka. The division is expected to contribute positively to the group in the future mainly derived from the hotel services in Cherating, Pahang, as well as unbilled sales amounting to RM12.2 million currently," it noted.

AZRB shares closed down 2 sen or 5.06% at 37.5 sen yesterday, with 1.95 million shares done, bringing a market capitalisation of RM199.37 million. — theedgemarkets.com

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