Kimlun sets internal profit growth of 10% to 15% this year

KUALA LUMPUR: Kimlun Corp Bhd is projecting an internal net profit growth of 10% to 15% for the financial year ending Dec 31, 2014 (FY14), driven by its record outstanding construction/manufacturing order book of RM2.09 billion as at March 31, 2014.

“We will try to increase [our profit] margins with better management as we have invested quite a lot in equipment for high-rise construction,” its chief executive officer Sim Tian Liang (pic) told reporters after the group’s annual general meeting yesterday.

“We are focused on increasing the productivity of our construction activities, and increasing the capacity and efficiency of our manufacturing plants,” he said.

On the outlook for the construction sector, Sim is of the view that it will remain bullish.

“Despite the slowdown in the property sector, infrastructure projects and the upgrading of highway routes and transport systems within the urban areas, in line with Vision 2020, will bring in a lot of government investment as, so there will be plenty of [construction] projects,” he said.

Of Kimlun’s total order book of RM2.09 billion, RM1.85 billion was contributed by its construction division whose projects are mainly in Iskandar Malaysia, Johor.

“Some 80% of our projects are in Johor, and our construction division will remain the main contributor to revenue for the group, followed by our manufacturing division,” said Kimlun chief financial officer Vennessa Yam.

The group is currently bidding for up to RM2 billion worth of projects, in which the outcome of the bids generally takes between three and five months, said Yam.

Meanwhile, Kimlun’s manufacturing division is principally involved in the supply of tunnel lining segments (TLS) for the Klang Valley mass rapid transit (MRT)project, as well as the Singapore MRT through its wholly-owned subsidiary SPC Industries Sdn Bhd.

For the upcoming Thomson Line and Eastern Region Line in Singapore, Sim believes that Kimlun’s track record from the Downtown Line would give it an opportunity to secure a proportion of the TLS supply order for the project.

Sim also said the group plans to develop its 8.87 acres (3.58ha) of land in Shah Alam, Selangor, into a bungalow development next year, and 5.31 acres of its land in Medini  Iskandar into a combination of small office/home office units and retail properties to be completed by the end of 2017.

Kimlun Corp

The gross development value for its proposed project in Medini Iskandar will be RM420 million.

This article first appeared in The Edge Financial Daily, on June 20, 2014.


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