Kelington Group Berhad reported an impressive financial performance for the first quarter profit attributable to shareholders of the company climbed 95% year-on-year to RM16.2 million from RM8.3 million in the prior year. The bottom-line growth was supported by a 78% increase in revenue to RM308.9 million, compared to RM173.3 million in the same period last year.
The group said the growth in top and bottom-line performance was attributed to significant double-digit growth in revenue contribution across all operating markets. Revenue from Malaysia which accounted for almost half of total revenue in 1Q2023 increased 83% to RM 142.5 million while revenue from Singapore and China rose 67% and 69% YoY respectively.
Ir. Raymond Gan, Chief Executive Officer said, “We are delighted to announce that the Group has achieved impressive results across various business divisions, establishing a solid foundation for the year. Moving forward, we maintain a positive outlook and have full confidence in our ability to execute and fulfill our commitments. It is worth noting that the Group is experiencing a healthy rate of orderbook replenishment across all segments.”
In terms of business segment, the Ultra High Purity division continued to be the primary revenue contributor, accounting for 59% of the Group’s total revenue in 1Q2023. Revenue from the UHP division grew by 62% to RM182 million, driven by increased contributions from Singapore, China and Malaysia. Meanwhile, revenue from the Process Engineering segment experienced a substantial jump of 199% YoY to RM35.7 million, primarily due to the contribution from a process engineering job in Malaysia.
The Industrial Gases segment maintained a strong performance in 1Q2023, with revenue more than doubling to RM24.1 million from RM9.9 million in 1Q2022. This growth was supported by higher production output as the Group successfully expanded its presence into a new geographical region, specifically the Oceania countries, for the sale of liquid carbon dioxide.
Kelington’s order flows remain buoyant as the Group has thus far secured RM467 million worth of contracts as at 31 March 2023. Inclusive of the carried forward projects from prior years, its total orderbook now stands at RM2.2 billion, of which RM1.8 billion remains outstanding as at 31 March 2023.
The growth prospects of the Industrial Gases segment continue to be promising, driven by the increasing demand for liquid carbon dioxide (“LCO2”) in line with the recovery of economic activities. The proposed investment in the second LCO2 plant at Kerteh will lead to a production capacity that is more than double the current level. This expansion is expected to have a substantial positive impact on the financial performance of the industrial gas division, with the anticipated effects to be realized from FY 2024 onwards. Currently, the utilization rate of the LCO2 plant currently stands at 91%.
On its balance sheet, gearing ratio stood at 0.76 times as at 31 March 2023. The Group’s total borrowings decreased to RM200 million from RM245 million as at 31 December 2022, mainly due to the repayment of borrowings in Malaysia. Notwithstanding, Kelington’s balance sheet remains healthy with net cash position of RM13.5 million as at 31 March 2023.
