Kerjaya Prospek’s 3Q earnings fall on higher finance cost, tax expense

The construction segment remains the main contributor to group revenue at 95%


KERJAYA Prospek Group Bhd’s net profit slipped 10.5% to RM33.01 million in the third quarter ended Sept 30, 2019 (3Q19), from RM36.88 million previously, on higher finance cost and tax expense.

Quarterly revenue fell 2.4% to RM263.33 million from RM269.89 million recorded in the same period a year ago.

The construction firm is expected to end the year on a flat note due to less income recognition from the property development segment, its executive chairman Datuk Tee Eng Ho (picture) said.

“Last year, over RM20 million was contributed from the property side. This year, (the contribution is) a few million only. But the construction side will be picking up,” he said at the group’s 3Q19 results briefing in Kuala Lumpur yesterday.

The construction segment remains the main contributor to group revenue at 94.8%, Tee added.

“Segmental revenue increased mainly due to steady progress construction work on-site. The (construction) segment is expected to continue to deliver positive results and improve the group’s overall turnover and profitability moving forward.”

Tee also said the group intends to pay higher dividends for the financial year ending Dec 31, 2019 (FY19), compared to a 3.5 sen dividend paid for FY18, given its net cash position.

The group, which is involved in construction, property development and the manufacturing of lighting and kitchen solutions, declared an interim dividend of 1.5 sen, payable on Jan 6, 2020.

It had a net cash position of RM190.8 million as at Sept 30, 2019.

Moving forward, the firm aims to focus on construction as its main revenue driver.

“Notwithstanding our objective to expand our core business in construction, we will maintain the manufacturing segment as part of our integrated business objectives and strategy, and complete the existing property development project,” it said.

The group’s outstanding orderbook stood at RM3.2 billion as of Sept 30, 2019, while contract wins for 2019 amounted to RM1.3 billion.

Shares of Kerjaya Prospek closed 6.92% or nine sen higher at RM1.39 yesterday, valuing the company at RM1.73 billion.