by HARIZAH KAMEL / graphic by MZUKRI MOHAMAD
KUB Malaysia Bhd will continue to implement mitigation measures to cushion the impact brought by the Covid-19 pandemic to its businesses.
The group foresees economic uncertainty, market turbulence and weak consumer sentiment to remain as issues throughout the remaining financial period.
In a bourse filing yesterday, KUB said it decided to monetise the value of its oil palm estate in Kluang, Johor, through a disposal which will also enable the group to avoid incurring significant capital expenditure (capex) for the respective ageing estate going forward.
“The group will reinvest the proceeds for its operations and expansion of its core businesses and future business opportunities as and when they arise and hopes to expand its information and technology business following the joint-venture arrangement with HFR Inc,” said KUB.
The move is expected to enable KUB to penetrate the more lucrative segments within the telecommunications industry and potentially secure higher margin opportunities.
Pre-emptive balance sheet and effective cashflow management will also be the group’s priority in the coming quarters in order to provide resilience to weather the current storm.
“KUB will proactively reassess its capex plans, tighten up operating expenditure, review investment decisions and re-optimise capital structure where necessary,” noted the group in its filing to the stock exchange.
The group showed signs of recovery in the third quarter ended Sept 30, 2020, with a net profit of RM12.71 million from a net loss of RM1.01 million a year ago.
Revenue for the quarter increased 11.88% to RM96.68 million from RM86.42 million a year ago.
The group stated that revenue recovered in the current quarter from the impact of the decline in crude oil prices and the imposition of the Movement Control Order in the previous quarter.
This led to an increase of 55.2% or RM34.4 million in the current quarter, largely driven by improved liquefied petroleum gas sales volumes by 38%, higher average contract price and higher average crude palm oil prices.