George Kent posts first quarterly loss since 2003 on lower segment profit, forex loss

• George Kent said its 3QFY2023 performance was affected by the challenging business environment amid inflationary pressures, supply chain delays, labour shortages and elevated oil prices coupled with a volatile ringgit.

KUALA LUMPUR (Feb 21): Metering and engineering group George Kent (Malaysia) Bhd swung to a net loss in its third financial quarter ended Dec 31, 2022 (3QFY2023), mainly due to lower contribution from the metering division and foreign exchange (forex) loss.

It posted a net loss of RM2.66 million in 3QFY2023 compared to a net profit of RM4.64 million a year earlier. As a result, it recorded a loss per share of 0.51 sen for 3QFY2023 versus earnings per share of 0.89 sen for 3QFY2022.

This was its first quarterly loss in 20 years after it posted a net loss for the quarter ended July 31, 2003.

In a filing with Bursa Malaysia on Tuesday, George Kent said its metering segment profit fell 54% to RM5.93 million for 3QFY2023 from RM12.95 million for 3QFY2022 mainly due to lower sales and gross profit margin.

Additionally, it reported a higher forex loss of RM4.57 million as at Dec 31, 2022 compared with RM340,000 as at Dec 31, 2021.

Revenue for the quarter was down 40.1% to RM56.72 million from RM94.66 million a year earlier.

George Kent said its 3QFY2023 performance was affected by the challenging business environment amid inflationary pressures, supply chain delays, labour shortages and elevated oil prices coupled with a volatile ringgit.

The weak quarterly performance dragged its net profit for the nine-month period ended Dec 31, 2022 (9MFY2023) lower by 22.7% to RM12.81 million from RM16.57 million in 9MFY2022, while revenue fell 13.07% to RM204.82 million from RM235.63 million in 9MFY2022.

In a separate statement, George Kent chairman Tan Sri Tan Kay Hock said notwithstanding the loss incurred for 3QFY2023, it is confident of the group’s continued resilience and ability to navigate the challenges posed by the ongoing economic uncertainties.

"During the quarter, George Kent continued to invest in new initiatives and capabilities, with a focus on strengthening our position as a leading producer of water metering products and solutions as well as a specialist in rail transportation systems and track works," he said.

"We remain focused on executing our strategy and investing in areas that will enable us to continue to grow and deliver value to our shareholders. Our long-term growth prospects remain strong and we look forward to continuing to build on our success in the months and years ahead,” Tan added.

George Kent shares closed unchanged at 54 sen on Tuesday, giving it a market capitalisation of RM301.4 million.