By MARK RAO
George Kent (M) Bhd will increase production of water meters to meet high demand as the product helped boost first-quarter profit.
The engineering and metering company posted a net profit jump of 23.3% year-on- year (YoY) to RM18.5 million for the first-quarter ended April 30, 2017 (1Q18), with earnings from the water meter business up 160% to RM9.7 million.
Chairman Tan Sri Tan Kay Hock said the segment’s performance for the quarter was a record high and as a result the group is aiming to increase capacity to meet customer demand.
“We want to expand as demand is growing and we are hard pressed to deliver all of our orders, especially since we distribute to countries outside Malaysia,” Tan told members of the press after the group’s AGM in Selangor yesterday.
The company currently produces 2.5 million water meter units and production capacity can increase to five to six mil- lion with additional equipment and production lines. “We are confident of demand for our products. As the manufacturer, we have control of the quality. We have secured a regular customer base and business is growing,” he said.
George Kent supplies water meter products to water authorities both domestically and internationally, including countries like Singapore and Hong Kong.
In June last year, the company secured its third consecutive contract from the Public Utilities Board of Singapore, worth RM14.7 million for the supply and delivery of 323,630 units of water meter units. The group presently operates in 43 countries worldwide.
Group revenue in 1Q rose 5.2% YoY to RM123 million on higher contributions from the engineering and metering divisions.
The engineering business continued to be its major contributor, raking in RM947.97 million in turnover, compared to the RM34.45 million brought in by the metering division.
Tan said construction accounted for 95% of the engineering division’s revenue and would continue to bring in higher revenue as it involved a bigger volume of contracts.
George Kent’s engineering and construction orderbook stands at RM6.13 billion, which would last about five years, he said.
“The second line of the mass rapid transit project is slated to finish early in 2023, while the Ampang light rail transit line extension will be completed by the end of the current financial year,” he added.
Tan said the group will continue tendering for projects within its business portfolio, including railways, water projects and hospitals.