Kerjaya Prospek sees earnings recovery in 2H

by ASILA JALIL/ pic credit: kerjayagroup.com

KERJAYA Prospek Group Bhd is expected to achieve RM1.5 billion of orderbook for the financial year 2020 and see a gradual earnings recovery from its third quarter (3Q20) after recording a lower net profit in its 2Q20.

The construction firm’s net profit plunged 71.9% year-on-year (YoY) to RM10.06 million in its 2Q20 ended June 30, 2020, from RM35.78 million registered in 2Q19 due to a halt in the group’s operations during the Movement Control Order (MCO) period.

The construction firm’s revenue declined 50.6% YoY to RM128.1 million in the quarter.

For the six months’ period, the group’s net profit declined 54.3% YoY to RM32.39 million, while revenue slid 35.1% YoY to RM339.94 million.

The construction division remained Kerjaya’s largest contributor as it accounted for 99.7% of the group’s revenue in the 2Q20.

Profit after tax margin declined from 13.8% to 7.9% due to fixed cost incurred but lower revenue during the MCO and higher fair value loss on investments.

Revenue for the construction segment declined by 30.8% compared to the preceding period mainly due to a halt in operations. The segment resumed operations in July 2020.

Its manufacturing segment reported a marginal profit of RM1,190 compared to a profit of RM1.7 million posted in the preceding period.

Kerjaya’s executive chairman Datuk Tee Eng Ho said earnings in the second half of the year are expected to pick up following gradual resumption in operations and secured contracts worth RM990.4 million as at June 30, 2020.

“I am confident we can achieve our orderbook target of RM1.5 billion. It would not be a problem for us to secure the remaining amount until December and this would come from multiple projects,” he said during a press conference of the group’s 2Q20 results briefing in Kuala Lumpur yesterday.