Kerjaya Prospek confident of maintaining double-digit profit growth

KUALA LUMPUR: Kerjaya Prospek Group Bhd is confident of maintaining double-digit growth in profit for the remaining quarters of the financial year ending Dec 31, 2022 on the back of strong demand for properties and robust construction activities despite the challenge of labour shortage.

Kerjaya Prospek chairman Datuk Tee Eng Ho said the group plans to launch more projects and will time them strategically.

“Year to date, we have secured RM1.3 billion worth of contracts, which bolstered our outstanding order book to RM4.3 billion which should provide earnings visibility over the next three years,” he told a press conference at its second quarter financial results briefing here today.

The group’s current tender book stands at RM1.5–2 billion, not including projects with Samsung C&T (KL) Sdn Bhd, a wholly owned subsidiary of South Korea’s Samsung C&T Corp.

On the operating outlook, Tee said although raw material prices are likely to stay elevated compared with pre-pandemic levels, they have started to taper off from their peaks in the first half of this year, which is expected to enhance Kerjaya Prospek’s bottom line.

Labour shortage is expected to continue to be a challenge for the group. At present, it employs 2,000 workers but it requires a total of 4,000 workers. It has received approval from the authorities to recruit 500 foreign workers but is still looking for 1,500 more.

Kerjaya Prospek will continue to carry out risk assessments and implement measures such as managing cash flow across supply chain to keep escalating cost to a minimal and reduce disruptions brought about by the pandemic to its projects’ timeline.

For the second quarter ended June 30, 2022 (Q2’22), Kerjaya Prospek’s net profit increased 78% to RM28.54 million from RM16.00 million last year as revenue strengthened amid improved progress inconstruction works. The group’s revenue grew 46% to RM276.92 million from RM189.89 million on higher progress billings. It declared a 1 sen per share second interim dividend.

For the first six months, its net profit rose 35% to RM57.40 million from RM42.39 million year-on-year while revenue grew 26% to RM577.51 million from RM458.56 million in the same corresponding period last year mainly attributed to the higher progress billings amid increased site activities. Year-to-date FY22, it declared a total dividend of 3 sen and Tee said it will declare more as cash flow is strong.

On the H2’22 segmental results, construction revenue and profit increased 25.5% and 43.1% respectively mainly due to higher construction works compared with last year as it faced impact from the full movement control order. The construction segment is expected to be the main contributor in future.

The property development segment posted RM100,000 profit and RM2.90 million in revenue. This segment is expected to contribute more to the group’s bottom line going forward.

Investment profit increased to RM22.1 million from RM3.8 million last year due to a RM20 million dividend received from a subsidiary company. The manufacturing segment registered RM40,000 profit, up from RM30,000 last year.