Kelington puts faith in order book to drive earnings

Kelington instals piping

PETALING JAYA: Kelington Group Bhd is confident of delivering a commendable performance in the second half of its financial year 2022 (2H22), based on its existing order book and shortage of semiconductors.

The integrated engineering solutions provider said it will continue to benefit from the semiconductor shortage as manufacturers race to expand production capacity by establishing new facilities.

As at June 30, 2022, the group had secured new contracts amounting to RM798mil.

“Including the projects carried forward from the previous years, our total order book stands at RM1.9bil, of which RM1.4bil remains outstanding,” the company said in a filing with Bursa Malaysia yesterday.

Kelington recently clinched an ultra-high purity (UHP) contract worth RM117mil from a customer in Singapore to undertake the bulk and specialty gas system distribution works.

For its the second quarter (2Q22), Kelington’s the group’s revenue grew by 147% year-on-year (y-o-y) to RM312.4mil, attributed to higher project completion in Malaysia and Singapore.

In terms of geographical breakdown, Malaysia was the largest contributor, representing 47% of the group’s revenue.

According to its filing, revenue from Malaysia soared 293% y-o-y to RM148mil in the quarter due to the contribution of a major general contracting job awarded in 3Q21.

Revenue from Singapore increased by 177% to RM104.7mil from RM37.8mil in the previous corresponding quarter.

The strong growth was mainly driven by higher revenue contribution from ultra-high purity (UHP) projects awarded during the 2H21.

Singapore stood as the second largest contributor, at 34% of total revenue.

Due to higher recognition from on-going projects, China contributed RM51.6 million in revenue in 2Q22, representing a 11% increase y-o-y, while revenue from Taiwan more than doubled to RM6.6mil from RM3.3mil in the previous corresponding quarter.

In line with higher revenue performance in 2Q22, Kelington’s net profit almost doubled to RM13.6mil compared with RM7.35mil in 2Q21.

For the 1H22, the group’s revenue more than doubled to RM485.7mil as compared to RM231.2mil in the previous comparative period,

This was mainly driven by the strong orders secured across the UHP and general contracting divisions as well as increase in demand in the industrial gases division, according to the group.

Consequently, in line with the topline growth, net profit for the 1H22 increased to RM21.86mil compared with RM12.9mil in 1H21.

The company declared a first interim dividend of 1 sen for the period, payable on Sept 22, 2022.