PETALING JAYA: Cahya Mata Sarawak Bhd’s (CMS) net profit for its first quarter ended March 31, 2017 surged over 2,000% to RM22.66mil from RM1.05mil in the previous corresponding period due to the reduction in the share of losses in the company’s associates.
In a filing with Bursa Malaysia, the company said the higher net profit was also attributed to increase in the share of profits from the joint ventures and higher earnings by the cement and construction and road maintenance divisions.
CMS, which is involved in cement manufacturing, construction materials and property development, among others, said revenue in the first quarter, however, dropped to RM282.30mil from RM346.91mil a year earlier.
It said the lower revenue was mainly due to a lower sales volume in the construction materials and trading and cement divisions.
“Furthermore, the construction and road maintenance division also reported lower revenue due to reduced federal road maintenance work and the completion of major projects in 2016.”
Commenting on the earnings, group managing director Datuk Richard Curtis said in a separate statement that the first quarter had been an important quarter in terms of meeting performance against targets, despite the challenging market and operational conditions faced by the group.
“The macro factors include low commodity selling prices and generally the sluggish regional private and public sectors resulting in reduced demand for construction materials and related services.
“Overall, the results for the first quarter are viewed positively as they reassure that the group is on track towards a much-improved performance for our 2017 financial results as against 2016.”
Supported by the company’s healthy balance sheet, Curtis added that CMS is well positioned to benefit from the state’s ever growing infrastructure needs, including the RM27bil Pan Borneo Highway project.
“The projected improvements in both the global and Malaysian economies for 2017 and 2018 also bodes well for our businesses.
“Looking further to the future, CMS’ potential high growth investments in SACOFA Sdn Bhd, Malaysian Phosphate Additives (Sarawak) Sdn Bhd and OM (Sarawak) Sdn Bhd are confidently expected to materially transform our longer-term profits growth,” he said.
Curtis said CMS continued to be one of the best proxy listed investments for Sarawak’s economic growth.
“This is consistent with the state’s promotion of energy-intensive industries under the Sarawak Corridor for Renewable Energy initiative, its rural transformation plans, its focus towards establishing a digital economy and the infrastructure and related services that will therefore be required across the state.”