KUALA LUMPUR: Integrated engineering solutions provider, Kelington Group Bhd reported a robust financial performance in the third quarter (3QFY21) and nine months ended Sept 30, 2021 and it is upbeat about its prospects.
In a statement on Tuesday, it said notwithstanding the operational disruptions arising from the Full Movement Control Order (FMCO) during the quarter under review, Kelington’s net profit in 3QFY21 rose 62% to a quarterly record high of RM8mil from RM4.9mil a year ago.
The company said revenue in 3QFY21 increased 8% to RM106.4mil versus RM98.3mil a year ago.
“The improved financial performance was attributable to higher projects completion in Malaysia and Singapore and a lower effective tax rate in 3QFY21,” it said.
In 9MFY21, Kelington posted a record-breaking financial performance as revenue rose 30% to RM337.6mil and net profit more than doubled to RM20.9mil as compared to previous corresponding period (9MFY20).
The improvement in both revenue and net profit was due to higher revenue contribution across all business segments alongside an expansion in gross profit margin to 16% in 9MFY21 as compared to 13% a year ago.
“Arising from the elevated expansion activities across the semiconductor industry, the ultra-high purity (UHP) segment continued to be the largest revenue contributor, representing 69% to the total revenue in 9MFY21.
“The process engineering and general contracting segments contributed 12% and 11% respectively to the total revenue,” it said.
Kelington said demand for the group’s liquid carbon dioxide (LCO2) has also increased in tandem with the resumption of economic activities in Malaysia and Singapore.
It pointed out revenue from industrial gases segment rose 57% YoY to RM23.9mil in 9MFY21 on the back of higher sales of LCO2.
Its CEO Raymond Gan said: “Despite the challenging operating landscape arising from the FMCO, our operations in Malaysia remained largely intact throughout the quarter and we managed to deliver commendable financial growth across all our business segments.
“We are on track to deliver a strong financial performance this year as our net profit in 9MFY21 has already exceeded our full year net profit in FY20.”
Gan said Kelington’s orderbook replenishment has been buoyant over the past several months due to new contracts.
Year-to-date, the group has clinched RM891mil worth of new contracts, boosting its orderbook to RM1.2bil, out of which RM932mill remains outstanding as at November 2021.
“Moving forward, we remain upbeat on the group’s prospects, underpinned by our robust order pipeline as well as increased participation in tender activities across our operating markets.
“We are confident to secure more projects in the coming months which will further elevate our financial performance in the foreseeable future. The arrival of 5G technologies and prevailing semiconductor chips shortage bode well for us as a leading UHP solutions provider as it accelerates the wafer fab capacity expansions by industry leaders,” he added.
As for its balance sheet, gearing ratio improved to 0.26 times from 0.35 times as at Dec 31, 2020.
Total borrowings decreased to RM49.1mil from RM58.5mil previously. Kelington remains in a healthy net cash position of RM50.1mil with total cash exceeding total debt.