Kerjaya sees better prospects ahead, expects FY22 revenue to return to pre-pandemic levels

KUALA LUMPUR (Mar 1): Construction outfit Kerjaya Prospek Group Bhd aims to restore its revenue to pre-pandemic levels in the current financial year ending Dec 31, 2022 (FY22), according to its non-executive chairman Datuk Tee Eng Ho.

In a virtual briefing on Monday (Feb 28), Tee said the group is targeting to attain an annual revenue of RM1 billion, which is comparable with its performance before the Covid-19 pandemic hit, which was followed by various forms of lockdowns and restrictions implemented as preventive measures by the government to stop the virus' spread.

The group saw its revenue in FY19 drop from RM1.06 billion to RM811 million in FY20 before recovering to RM964.93 million in FY21.

Its net profit slipped from its peak of RM140.18 million in FY19, to RM90.75 million in FY20 before recovering to RM96.96 million in FY21.

The group's target will be supported by its higher order book target of RM1.2 billion for FY22 — compared with RM1.02 billion achieved in FY21 — as the group's operations fully resumed after the economic reopening last October.

Its chief executive officer and executive director Tee Eng Tiong has a more bullish view on its new order book achievement, saying: "We are optimistic about exceeding our target order book win of RM1.2 billion in FY22 as we have already surpassed 50% of this target with the recent award of Astrum Ampang worth RM710.1 million."

"Despite the labour shortage issue and increased commodity prices, we are confident in maintaining at least double-digit profit after tax margin as we aim to leverage on our efficient resource management, and we have priced in buffers in our new contracts to mitigate the higher prices.

"Going forward, once commodity prices start to taper down, our profit margins for existing projects are expected to increase as our costs will be reduced. We also hope that as the economy begins to recover, we can achieve pre-pandemic level figures," Eng Tiong added.

Its construction segment now has an outstanding order book of RM4.1 billion, which should keep the group busy until 2026.

Meanwhile, the group has a tender book worth RM1.5 billion to RM2 billion to date, which it expects will be fuelled by opportunities in infrastructure contracts from the Seri Tanjung Pinang Phase 2 (STP 2) development, as STP 2 is estimated to have RM2 billion worth of projects targeted to be completed in the next five to seven years as well as pent-up demand in properties amid more new development projects targeted to be launched going forward.

The group also expects better revenue contribution this year to be aided by its property segment as it is set to launch two property development projects.

The property developments are Monterez Development with an estimated gross development value (GDV) of RM250 million and Yakin Land Development with an estimated GDV of RM380 million.

Kerjaya Prospek did not provide any property sales guidance during the briefing as it will only share it after the launch of the property developments at a later date.

For full FY21, Kerjaya Prospek's net profit rose 6.84% to RM96.96 million, from RM90.76 million a year ago, as revenue expanded by 18.98% year-on-year.

The better revenue was attributed to higher progress billings compared with in the previous year as a result of higher site activities amidst fewer movement restrictions implemented during FY21.

Notably, the group's construction division contributed to approximately 100% of the total revenue due to the absence of any property development projects in the year under review.

Net profit for the fourth quarter ended Dec 31, 2021 (4QFY21) expanded 8.61% to RM30.39 million from RM27.98 million on the back of higher revenue. Revenue increased by 14.01% to RM283.72 million from RM248.85 million a year ago, thanks to improved construction work progress.

The group declared its second interim dividend of two sen per share, payable on April 8. Coupled with its first interim dividend, the total dividend declared for FY21 amounted to 3.5 sen per share.

Shares in Kerjaya Prospek closed three sen or 2.5% lower at RM1.17, bringing it a market capitalisation of RM1.45 billion.

Edited by Lam Jian Wyn

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