Water supply project helps grow KKB Group’s revenue

  • Metro Biz
  • Saturday, 21 Feb 2015

A fire drill was carried out at KKB Engineering Bhd head office, Jalan Kilang in Bintawa industrial estate here to raise staff’s awareness on fire emergency and prevention.

KUCHING: A robust steel pipe manufacturing business has bolstered KKB Engineering Bhd’s quarterly profits.

In the fourth quarter to Dec 31, 2014 (4Q-2014), KKB group’s nett profits soared to RM8.3mil from RM3mil in 4Q-2013 as revenue grew to RM66mil from RM47.6mil.

“Revenue for the group’s manufacturing sector of RM57mil (4Q-2013:RM24.5mil) surpassed the preceding year corresponding quarter’s revenue by more than double (132.7%) due to the strong performance of the steel pipes manufacturing division.

“Revenue from steel pipes business under two subsidiary companies has improved with aggregrate revenue of RM55.6mil as compared to RM23.4mil in the preceding year corresponding period.

“The positive growth in revenue is attributed to the on-going supply of polyurethane lined mild steel pipes,” KKB said in explanatroy notes to its latest quarterly results.

Subsidiary firm Harum Bidang Sdn Bhd is supplying the steel pipes for the Tanjung Manis water supply project in Mukah Division.

KKB said its LPG cylinders manufacturing business also posted higher revenue (+32.5%) for the supply of cylinders to Petronas Dagangan Bhd and Petron Malaysia Refining & Marketing Bhd.

While the manufacturing segment had done well, the group’s engineering segment had reported weak results due to fewer construction and steel fabrication projects.

The construction division’s revenue slipped to RM2.2mil (4Q-2013:RM3.1mil) which was derived solely from progressive claims made on existing pipeline project and sales contributions from the tail end of projects.

The steel fabrication division’s turnover slumped by 69.3% to RM5.9mil (4Q-2013:RM19.2mil), contributed mainly by on-going projects — Petronas LNG Train 9, CMS clinker plant and supply of low/high tension steel poles and subcontract works for the fabrication of platforms.

The hot dip galvanising division had its revenue rose by 30.6% to RM1.1mil from RM842,000 during the quartrer under review.

For the whole year, KKB recorded lower group’s nett profit of RM23.9mil against RM34.9mil in 2013 in line with shrinking revenue of RM202mil, down from RM228.9mil.

The 2014 revenue came from manufacturing segment (RM160.3mil) and engineering segment (RM41.7mil).

The manufacturing segment posted nett profit of RM27.1mil which was offset by a nett loss of RM3.2mil by the engineering segment.

Commenting on 2015 prospects, KKB said it was anticipating a challenging year in view of the tough operating business environment due to the fall in global crude oil prices and uncertainity in world economy.

It said factors that might impact the group’s performance include escalation of costs due to inflationary pressure, volatility of global raw material steel prices and fluctuation of exchange rates.

“The group’s diversified portfolio provides a resilient platform to mitigate adverse market conditions and uncertainity.

“We remain focus and continue our efforts to strengthen and grow our core business in both the engineering and manufacturing activities based on strong fundamental to optimise our operations towards a sustainable growth,” added KKB.

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Business , East Malaysia , kkb engineering


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