Kimlun 2Q net profit up 37% on higher construction, manufacturing revenue

KUALA LUMPUR (Aug 30): Kimlun Corp Bhd's net profit rose 36.6% to RM13.45 million in the second quarter ended June 30, 2019 (2QFY19) from RM9.85 million a year ago, on higher revenue achieved by the construction and manufacturing and trading (M&T) divisions.

This resulted in a higher earnings per share of 4.05 sen for 2QFY19 compared with 3.07 sen for 2QFY18. Revenue for the quarter under review also increased 49.2% to RM325.17 million from RM217.97 million a year ago.

In a bourse filing yesterday, Kimlun said construction revenue increased 45% year-on-year (y-o-y) in 2QFY19, mainly due to higher revenue contribution from the Pan Borneo Highway Sarawak project on higher percentage of completion.

The improvement in M&T revenue by 84.2% y-o-y in 2QFY19 was due to higher volume of precast concrete products supplied to the Klang Valley Mass Rapid Transit Line 2 project and quarry products supplied to the Pan Borneo Highway Sarawak project.

The property development division recorded a lower revenue in 2QFY19 as fewer houses were sold during the period.

"There is no on-going development carried out by the group on its existing land bank totaling 204 acres and the group does not expect any new launching until early of 2020, subject to the sentiment of the property market," said Kimlun.

The improved quarterly performance lifted the group's net profit for the cumulative six months (1HFY19) by 30.6% to RM29.38 million from RM22.5 million a year ago, while revenue was up 46.7% to RM643.72 million from RM438.9 million in 1HFY18.

Kimlun has an estimated construction and manufacturing balance order book of RM1.7 billion and RM300 million respectively as at June 30, 2019.

"The board is positive of the performance of the group in 2019 as the balance order book is expected to support the group’s performance in 2019," it added.

On-going projects and sales orders comprise contracts secured from Lebuhraya Borneo Utara Sdn Bhd, MMC Gamuda KVMRT (UGW) Joint Venture, UEM Sunrise Bhd Group, Sunway Iskandar Sdn Bhd, Hillcrest Gardens Sdn Bhd and China Railway First Group Co Ltd.

"The group will continue to actively bid for new construction projects in Malaysia, in particular those in relation to affordable housing development which continue to receive strong demand from the low and middle income group," said Kimlun.

Kimlun shares closed unchanged at RM1.26 today, with 5,400 shares done, bringing a market capitalisation of RM428.17 million.

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