KUB Malaysia’s 4Q earnings fall to RM7.8m

by S BIRRUNTHA / graphic by MZUKRI MOHAMAD

KUB Malaysia Bhd’s net profit for the fourth quarter ended Dec 31, 2020 (4Q20), declined by 72% year-on-year (YoY) to RM7.76 million due to the challenging conditions arising from the pandemic and depressed global oil market.

Revenue for the period amounted to RM110.86 million.

In a filing to Bursa Malaysia yesterday, KUB said its liquefied petroleum gas (LPG) division’s revenue grew significantly by 38% or RM16 million, largely driven by lower average contract prices and sales volumes.

The group’s ICT division’s revenue rose 37% to RM29.8 million primarily due to the commencement of newly acquired contracts.

The group’s agro business benefitted from higher prices for crude palm oil.

Its power division recorded a lower loss in the period supported by higher operating margins and lower administrative expenses.

KUB also said the group’s property management segment achieved favourable results during the period, mainly contributed by a significant gain on disposal of KUB-Berjaya Enviro Sdn Bhd, and plots of land in Langkawi, Kedah, as well as substantially lower manpower expenses.

Moving forward, the group foresees economic uncertainty, market turbulence and weak consumer sentiment to remain as issues throughout the remaining financial period amid the Covid-19 pandemic and volatility in global crude oil prices.

“Although the growth in demand for LPG has slowly recovered from June, the resurgence of Covid-19 infections in the country and the extended Movement Control Order imposed by the government would likely cause further disruption to the business and (it) is expected to still persist throughout the next few months,” it noted in an exchange filing yesterday.

KUB will continue to seek for sizeable contracts to expand its ICT business following the joint-venture arrangement with HFR Inc in 2Q20.

It noted that preemptive balance sheet and effective cashflow management will be the group’s priority in the coming quarters in order to maintain sustainability of its businesses under the present circumstances.