Integrated engineering solutions provider, Kelington Group Berhad has reported a revenue increas by 11 percent year-on-year (“YoY”) to RM84.7 million from RM76.4 million in the same period last year (1Q2019), driven by higher revenue from Singapore operations. Revenue contribution from Singapore grew 60 percent to RM49.8 million in 1Q2020 from RM31.1 million in 1Q2019, making it the largest revenue contributor at 59 percent of total revenue.
However, the robust growth was offset by the drop in revenue from China, which stood at RM12.9 million in 1Q2020 versus RM22.1 million in 1Q2019, due to operational disruptions caused by the Covid-19 lockdown in end January 2020. Revenue from Malaysia and Taiwan contributed RM20.0 million and RM1.2 million respectively.
In terms of business segment, the UHP division registered a strong performance as revenue increased by 44 percent to RM63.5 million in 1Q2020, on the back of higher projects completion in Singapore and Malaysia.
On the other hand, the Process Engineering division generated lower revenue of RM11.1 million in 1Q2020 as compared to RM20.8 million last year, while revenue from General Contracting division stood at RM5.2 million against RM10.3 million in 1Q2019.
Meanwhile, the Industrial Gases division continued to progress well with an improved revenue of RM5.0 million in 1Q2020, mainly driven by higher contribution from the new liquid carbon dioxide manufacturing plant, which commenced production in October 2019.
The Group recorded a net profit of RM4.1 million in 1Q2020, 15 percent lower from RM4.8 million in 1Q2019.
Commenting on the Group’s financial performance, Raymond Gan, Chief Executive Officer of Kelington Group Berhad said, “Our performance in the first two months of 2020 was relatively strong, however project work at our operating sites experienced a slowdown following the quarantine lockdowns enacted in China, Malaysia and Singapore due to the Covid-19 pandemic outbreak. Hence, there will be inevitable delays in completing some projects.”
“Currently, in line with the ease of restrictions, our teams are gradually resuming operations across our key markets, while adhering to stringent health and safety guidelines. As for project flow, we have been actively participating in project tenders throughout the lockdown period.”
He added that the Group received approximately RM149 million worth of new orders in the first 4 months of the year. Inclusive of the carried forward projects from FY2019 and new orders in FY2020, Kelington’s total orderbook grew to RM407 million, of which RM321 million remains outstanding. The Group’s tenderbook currently stands at approximately RM0.9 billion.
“We believe that the slowdown is short-term and will pick up pace as semiconductor players resume their expansion activities. Similarly, we anticipate demand for our liquid carbon dioxide to gradually recover as more economic sectors are reopening. Meanwhile, we are carefully monitoring the evolving market condition and have implemented certain mitigation measures to minimise the impact of the outbreak. We are confident of riding out this unprecedented time backed by our strong financial position as well as our healthy orderbook,” he added further.