KUB to aggressively bid for ICT contracts

by ANIS HANANI AZMAN / graphic DZUL ASYRAF

KUB Malaysia Bhd will continue to aggressively bid for further sizable information ICT contracts to enhance its orderbook, and also actively explore new sources of revenue growth to create more recurring and sustainable income in the ICT business in the future. 

KUB stated that it will further strengthen the various operational improvements and cost management initiatives in the division. 

“Recognising the continued threat that the uncertainty of the pandemic presents, we will continue to prioritise pre-emptive balance sheets and effective cashflow management over the coming quarters to maintain the sustainability of our businesses. 

“Amid prevailing uncertainties, we will continue to be vigilant and take appropriate and timely measures to sustain the group’s profitability for the financial year 2022,” KUB stated in its exchange filing yesterday. 

KUB reported a net profit of RM4.47 million for the quarter ended Sept 30, 2021, largely driven by the increase in average liquified petroleum gas (LPG) contract price (CP) and strong uptrend in crude palm oil (CPO) prices. 

There is no comparison figure due to a change in financial year-end from Dec 31 to June 30. It’s revenue for the quarter stood at RM106.21 million. 

The company added that its sales demand and operations, on the other hand, continue to experience the impact from the Covid-19 as a result of several containment measures taken by the government. 

“LPG division recorded a revenue of RM91.6 million on the back of a high average CP compensated by a lower than projected average monthly sales volume in both domestic and industrial segments,” it said. 

The agro division’s revenue and profitability are now entirely from the group’s plantation estates in Mukah, Sarawak. 

The division posted a revenue of RM10.5 million supported by the continued uptrend in CPO prices in the current period. 

KUB said the outlook for the overall performance for the financial year ending June 30, 2022, will largely depend on movements in global crude oil and palm oil commodity prices, as well as the Covid-19 pandemic related measures undertaken by the government. 

Notwithstanding the ongoing uncertainties, the group is cautiously optimistic its performance will remain stable, supported predominantly by the LPG and agro divisions. 

“The continuing effects of the pandemic are likely to affect our LPG business in particular, with diminished demand among the commercial market customers 

in our core southern region market likely to persist until the reopening of the Malaysia-Singapore border. 

“However, with the National Recovery Plan and relaxation of various standard operating procedure, the group expects the demand for LPG will increase, albeit the speed of the recovery depends on various other factors as well as the regions we operate,” it added. 

KUB will also continue to embark on various initiatives by enhancing marketing and customer segmentation strategies, improving supply and inventory management capabilities, and initiating cost containment efforts across the division. 

For the agro division, KUB expects the CPO prices to remain favourable throughout the year. 

“The acute shortage of workers due to continued restrictions on foreign workers movement and rising fertiliser cost remains as a concern to the group hence we anticipate that this challenging operating environment will continue in the near term. 

“To overcome this, we have accelerated our mechanisation programme in various field operations to alleviate the workers shortage challenge in our estates. Overall, with the anticipated strong CPO price to hold up throughout most of the financial year, we expect the plantation segment to continue to perform well,” it said.