KUALA LUMPUR (May 20): Serba Dinamik Holdings Bhd's net profit rose 18.9% to RM133.60 million for the first quarter ended March 31, 2020 (1QFY20), from RM112.37 million for the corresponding quarter last year, as all its business segments registered growth.
Revenue was up 29.9% at RM1.27 billion, from RM984.38 million, due to higher call-out works under its operation and maintenance (O&G) business, as well as higher engineering, procurement, construction and commissioning (EPCC) activities.
Notwithstanding the stronger quarterly earnings, the group declared a lower first interim dividend of 1.2 sen per share for FY20, compared with 2.3 sen per share for the same period of FY19. The dividend will be paid on June 26. The entitlement date is fixed to be June 15.
In a filing, the group said its O&M segment, which contributed 86.8% of its total revenue for the quarter, saw its top line rising 29.2% year-on-year (y-o-y), largely driven by higher maintenance activities in the Middle Eastern countries like the United Arab Emirates (UAE), Qatar and Oman, as well as Malaysia. The segment recorded a 28.3% rise in operating profit to RM202.5 million, with a gross margin of 18.2%.
Meanwhile, EPCC revenue posted a y-o-y growth of 26.5% to RM140.7 million, making up 11% of the group's latest quarterly revenue. The improved revenue was mainly driven by its chloralkali plant in Tanzania and activity with Petronas Carigali Sdn Bhd in Malaysia. The segment recorded an operating profit of RM21.7 million, up 26.1% y-o-y, with a gross margin of 15.5%.
Both its smaller business segments of information, communication and technology (ICT) and education and training (E&T) also showed improved revenue and operating profit. ICT revenue jumped 95.7% to RM27.93 million, with operating profit rising 32% to RM4.28 million. E&T revenue tripled to RM413,000, from RM157,000, with operating profit climbing 173% to RM210,000.
On prospects, Serba Dinamik said despite the sharp plunge in oil prices in recent months, its existing contracts are still being drawn down and honoured as oil production is still running.
And by incorporating value-added features like artificial intelligence (AI), its predictive maintenance had gained better respect from customers, it said, adding that the added integrated solutions had helped the group secure more new contracts locally and abroad.
The group also said it will showcase its ability to synergise its EPCC and ICT business segments via a newly secured contract to build an innovation hub and IT infrastructure in Abu Dhabi, the UAE. The job was awarded by Block 7 Investments LLC.
“The development will position the group as one of the companies helping local, regional and global businesses as well as academia to adopt Industry 4.0 technologies,” it said.
Overall, the group said its management is positive about its prospects.
Shares in Serba Dinamik closed four sen or 2.3% higher at RM1.79 today, giving it a market capitalisation of RM6.06 billion.