Posted on 29 Feb 2016
The company said, however, that to minimise the negative impact, the group’s financial effect due to this exchange rate fluctation had been adequately risk managed at this stage.
“This year will be a challenging year for the group against the backdrop of continued uncertainities in the global economy,” KKB said of its prospects when releasing its yearly financial results.
In the financial year ended Dec 31, 2015, KKB posted group pre-tax profit of RM37.5mil which was 17.6% higher than RM31.9mil in 2014. The higher earnings were achieved despite a steep drop in group revenue to RM127.9mil from RM202mil. The company has recommended a first and final single tier dividend of four sen for 2015, the same as 2014.
In the October-December quarter, KKB incurred a group pre-tax loss of about RM2.5mil against a pre-tax profit of RM13.1mil in the previous corresponding period as turnover fell sharply to RM12.8mil from RM66mil.
The company said its overall financial performance in the quarter under review had been affected due to competition within the industry for limited works available for both steel fabrication and civil construction sectors under the prevailing softening of global economy.
Breaking down the quarter revenue, the company said the manufacturing segment contributed RM7.8mil or 61% while the engineering segment chipped in with RM5mil.
“Quarter-on-quarter, the LPG cylinders manufacturing division recorded an increase in revenue by more than triple. The increase sales volume to Petron Malaysia Refining & Marketing Bhd (formerly Esso Malaysia Bhd) and the export of LPG cylinders to Brunei Shell Marking Company Sdn Bhd have contributed to the overall improved performance of the division.
This year, KKB expects a slowdown in the group’s prospect to secure new viable civil construction/steel fabrication work while it would continue with on-going projects secured earlier.
“The declining crude oil prices has caused major oil companies in Malaysia to make substantial cuts in their capital expenditures on fields development, leading to the review, deferment or cancellation in the award of approved projects which will have an impact on the group’s engineering sector.
“Notwithstanding, our diverse portfolio of businesses coupled with the group’s healthy financial position with relatively low gearing will provide us with the resilience to mitigate the adverse effects under the prevailing competitive and challenging business environment,” added the company.
