Kimlun's 4Q profit plunges 71%, proposes one sen final dividend

KUALA LUMPUR (March 27): Engineering and construction services provider Kimlun Corp Bhd's net profit plunged 71.39% to RM4.78 million for the fourth quarter ended Dec 31, 2020 (4QFY20), from RM16.71 million a year earlier, due to lower contributions from its construction, property and investment divisions.

Quarterly revenue dropped 24.59% to RM243.57 million, from RM322.97 million previously, on lower revenues achieved by all the business divisions, the group said in its filing with Bursa Malaysia.

On a quarter-on-quarter (q-o-q) basis, net profit fell 24.72% from RM6.35 million in the preceding quarter, despite a 14.99% rise in revenue from RM211.81 million.

Kimlun attributed the higher q-o-q revenue to higher sales achieved by the manufacturing and trading division, driven by a pickup in momentum of its delivery products to Singapore as its customers' construction activities were back to track after the Covid-19 pandemic was under control in Singapore.

The group proposed a final dividend of one sen per share, with the payment date to be announced later.

Kimlun said its construction revenue fell 27.4% to RM188.47 million, from RM259.57 million a year earlier, due to the Movement Control Order period which halted the group's business operations.

This was also driven by a shortage of foreign workers consequential upon the freeze on recruitment of new foreign workers in the country since June 2020, as well as the supply contracts in relation to the supply of segmental box girders, tunnel lining segments and other precast concrete products to the MRT2 project is at tail end.

The group's manufacturing and trading revenue decreased 16.8% to RM82.16 million, from RM98.71 million a year ago, caused by the slowdown in the construction activities in Malaysia and Singapore, resulting in low delivery of the group's products during the period under review.

For the full financial year, Kimlun's net profit tumbled 86.32% to RM7.99 million from RM58.39 million in the previous year. Full-year revenue dropped 42.45% to RM749.71 million from RM1.3 billion.

On prospects, Kimlun said it will continue to bid actively for projects and sales orders in order to replenish the group's order book and contribute positively to the group's result in 2021 and beyond.

"The group's track record in the industries that it operates in, and extensive experience in our business facilities, coupled with the support from various bankers, are good supporting factors for the group to bid for and execute future projects.

"In addition, the group has obtained additional certification from CIDB (Construction Industry Development Board) in late 2020 on its qualification to construct hospitals. This has further expanded the range of construction projects which the group can bid for," it said.

Kimlun's share price closed up 3.5 sen or 4.07% at 89.5 sen yesterday, valuing the group at RM314.44 million.

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