[ENGTEX GROUP BHD，受到国际及国内金属价格波动及建筑，公用事业及基建及物业发展等项目的实施时间点的影响]
The decrease in corresponding profit before taxation was mainly due to a gain on disposal of a piece of vacant industrial land in Johor of approximately RM7.1 million in the preceding year corresponding period, increased market price competition and raw material costs for certain manufactured steel products, and the escalated construction cost for its recently completed Amanja property development project in Kepong. Total bank borrowings mainly used to procure raw materials and trading inventories, and finance working capital requirement has increased from RM548.1 million as at 31 December 2017 to RM561.6 million as at 31 March 2018 and the reduction in cash and cash equivalents from RM111.8 million as at 31 December 2017 to RM89.5 million as at 31 March 2018 were mainly utilised to finance higher inventories and pare down bridging and term loans. The Group’s financial position is at manageable level with net gearing at 0.67 times as at 31 March 2018 as compared to 0.63 times as at 31 December 2017 and this enables the Group to have better flexibility in cash flow management.
Wholesale and distribution division:
The increase in revenue and profit before tax was mainly attributed to the rebound in market demand for certain metal related trading products in light of the volatility in international and domestic metal prices.
The division recorded a lower segment revenue and profit before tax of RM14.5 million and RM8.6 million respectively representing a decrease of 39.0% and 53.9% respectively as compared to 2017. The operating profit before tax in 2018 of RM8.6 million was lower as compared to RM11.5 million (excluding the gain on disposal of a piece of vacant industrial land of approximately RM7.1 million) in 2017 mainly due to increased market price competition and the increase in raw material costs.
Property development division:
The division recorded a loss before tax of RM1.9 million mainly due to escalated construction cost of project.
The division recorded a combined loss before tax of RM1.6 million mainly attributable to the finance cost and depreciation incurred totaling RM1.5 million during the current quarter.
The decrease in revenue and profit before tax as compared to preceding quarter ended 31 December 2017 was mainly due to the softening of market demand for certain metal related trading products and manufactured steel products in tandem with the volatility in international and local metal prices, and the escalated construction cost in the recently completed property development project in Kepong.
Growth in the construction sector moderated in the quarter. While growth of the civil engineering sub-sector was stronger, supported by the transportation, petrochemical and power plant projects, the sector’s performance was affected by weaker activity in the residential and non-residential sub-sectors. This is consistent with the significant number of unsold residential properties and the ongoing weaknesses in the commercial property segment (oversupply of office spaces and shopping complexes).
The performance of the Group will continue to be affected by factors such as the volatility in the international and domestic metal prices, and the timely implementation of projects in the construction, utilities and infrastructure and property development sectors. The Directors remain cautiously optimistic on the performance of the Group in the current year which is dependent on the domestic demand and global economic environment.
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