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George Kent's Q1 profit shrinks 72% to RM3.7m

KUALA LUMPUR (June 24): George Kent (M) Bhd recorded a 72% year-on-year drop in net profit to RM3.73 million in the first quarter ended April 30, 2020, as it ceased its water meter production as well as construction activities following the the Movement Control Order (MCO).

Revenue was 53% lower at RM39.31 million compared with RM82.78 million a year earlier, the company said in a filing with Bursa Malaysia yesterday.

George Kent said construction activities ceased completely amid the MCO and work only recommenced in early June after the completion of the mandatory foreign worker health screenings for Covid-19.

“The company intends to accelerate progress as it adapts to the government’s standard operating procedures (SOPs),” it said.

On the metering business, George Kent said although orders for its water meters continued to come in, the company was unable to meet demand due to the full closure of its factory until early May.

The factory, which only resumed operations with full workforce capacity and without limitation in operating time from May 4, is now increasing its manufacturing capacity to clear the backlog of orders and cater for new orders from contract extensions and new tenders from local and regional water authorities.

Chairman Tan Sri Tan Kay Hock said in the medium term, the company’s performance would continue to be affected by disruptions including supply-chain issues, government SOPs and social distancing requirements.

"We continue to be cautiously optimistic of our prospects," he said.

Tan said the company was actively expanding its product portfolio through partnerships with other manufacturers in line with its strategy to become a one-stop purveyor of water meters.

"Our long-term license agreement with Honeywell enhances our control over component supply and production costs. It also gives us the right to sell water meters to 15 new territories in Asia," he said.

George Kent’s smart metering technology is undergoing real-world tests through proofs of concept and pilot projects with state water authorities. "We are pursuing other such opportunities both in Malaysia and the region,” he said.

Tan said the company also had a team dedicated to developing new opportunities in the regional railway space, leveraging on its expertise as rail systems specialist in domestic railway projects.

“The company’s established network with international rail specialists will assist us in tapping into regional projects requiring international collaborations through joint ventures or strategic alliances,” he added.

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