The fall in profit is partly due to decline in profit at its engineering division which mainly depends on its construction activities
By FARA AISYAH / Pic By MUHD AMIN NAHARUL
George Kent (M) Bhd (GKent) noted that the absence of contribution from the Light Rail Transit Line 3 (LRT3) project led to its net profit for the third quarter ended Oct 31, 2018 (3QFY19), falling by 28.35% year-on-year (YoY) to RM20.55 million.
In an exchange filing yesterday, the company noted that the decline in profit was partly due to a 23% YoY decline in profit at its engineering division to RM24.83 million, which mainly depended on the contribution from its construction activities.
GKent’s revenue for the 3Q fell 18.52% YoY to RM103.55 million. The company declared a second interim dividend of 1.5 sen to be paid on Jan 29, 2019.
GKent’s share price rose 7.5 sen or 9.9% to 83 sen on the release of the 3QFY19 results.
GKent’s construction business in the quarter was impacted by the renegotiation of the LRT3 project, which is currently being redesigned based on the revised specifications.
GKent chairman Tan Sri Tan Kay Hock said the results for the quarter under review continued to be credible taking into account the nominal contribution from the LRT3 project.
He expects construction of the LRT3 to resume in the latter part of 2019.
“The group is staying sure and steadfast on implementing its strategic plan to broaden its income base.
“This entails substantial investment of resources, both human and financial, into growing its metering and other water-related businesses and investments.
“The group is also actively pursuing regional railway opportunities, while being committed to delivering on our existing orderbook,” Tan said in a statement yesterday.
GKent’s metering division recorded a 13% YoY drop in profit to RM10.19 million due to lower sales in the quarter, while revenue decreased by 15% YoY to RM38.41 million.
However, GKent’s water meter orders continue to be strong. The group recently won the Public Utilities Board of Singapore’s tender to deliver 110,000 meters over six months beginning February 2019.
Its automated meter reading solution is undergoing pilot testing in several states with commercialisation set for 2019.
The company is participating in tenders under the non-revenue water initiative of the national water meter replacement programme, which should further catalyse sales in the country.
The group is also on the lookout for opportunities in the regional railway space, leveraging on its expertise as rail systems specialist in domestic railway projects.
GKent has established networks with international rail specialists to bolsters its standing for projects requiring international collaborations through joint ventures or other forms of strategic alliances, the statement noted.