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Kelington records 11-fold hike in 2Q net profit on greater revenue contribution

KUALA LUMPUR (Aug 24): Kelington Group Bhd recorded an 11-fold jump in net profit to RM7.35 million in the second quarter ended June 30, 2021 (2QFY21), from RM623,000 a year earlier, on greater revenue contributions across its operating markets.

Earnings per share rose to 2.29 sen from 0.2 sen, the engineering solutions provider said in an exchange filing.

Quarterly revenue rose 63.43% to RM126.39 million, from RM77.33 million in 2QFY20, on the back of higher project completion in Malaysia, Singapore and China as well as improved performance from the industrial gases business.

"Revenue from Malaysia doubled to RM37.6 million, representing 30% of total revenue, from RM18.7 million in 2QFY20, driven by higher revenue recognition from process engineering and general contracting projects as well as the project newly awarded in 4QFY20.

"Meanwhile, the Singapore operation recorded a strong rebound with revenue of RM37.8 million as compared to a lacklustre revenue performance of RM21.1 million in 2QFY20. Both operations are recovering from the operation halt in the same period last year," said Kelington.

Revenue from China operations increased 45% to RM46.6 million from RM32.1 million a year ago, mainly due to higher Ultra High Purity (UHP) projects.

Kelington said the industrial gases segment continued an upward performance with higher production output. Revenue grew to RM7.6 million, an increase of 156% from 2QFY20, as demand for liquid carbon dioxide returned amid a resumption of economic activities.

Kelington declared a first interim dividend of 0.5 sen per share, to be paid on Oct 1.

For the first half of FY21, the group's cumulative net profit soared 175.67% to RM13 million, from RM4.68 million in the previous January-June period, while cumulative revenue grew 42.66% to RM231.21 million from RM162.06 million.

Kelington said it remained healthy in a net cash position of RM26.5 million with total gross cash in hand of RM83 million exceeding total debt of RM56.5 million as at June 30.

The group said the decrease in borrowings was mainly due to repayment of invoice financing loans for projects. Net cash per share stood at eight sen while gearing ratio was at 0.32 times.

Kelington chief executive officer Raymond Gan said the group is targeting to deliver strong growth of earnings in FY21.

"Looking ahead, we remain optimistic on the future outlook as we have our hands full working on a substantial outstanding order book which will contribute meaningfully to the group's financial performance.

"Meanwhile, we continue to receive tender invites across our operating markets, of which majority of these tenders are for projects in the UHP and process engineering segments," he said in a statement.

Shares of Kelington rose 4.1% or five sen to close at RM1.27, giving the group a market capitalisation of RM819.46 million.

http://www.theedgemarkets.com/article/kelington-records-11fold-hike-2q-net-profit-greater-revenue-contribution

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