KUALA LUMPUR (Dec 20): George Kent (M) Bhd shares fell 4.22% in early trade this morning after its net profit for the third quarter ended Oct 31, 2018 (3QFY18) fell 28.34% year-on-year to RM20.55 million from RM28.68 million a year earlier, on the back of lower segment profit.

At 9.05a, George Kent fell 3.5 sen to 79.5 sen with 929,900 shares traded.

Revenue for the quarter slid 18.5% to RM103.55 million from RM127.09 million a year ago, due to completion of a few projects in 2017.

George Kent declared a second interim dividend of 1.5 sen per share, payable on Jan 29, 2019.

Meanwhile, Hong Leong IB Research maintained “Hold” on George Kent at 83 sen with a lower target price of 97 sen (from RM1.27) and said George Kent’s 9MFY19 earnings of RM62 million (-19% y-o-y) were below both HLIB and consensus expectations.

In a note today, the research house said year-to-date core PATAMI decreased due to lower contribution from both metering segment and LRT3 PDP JV.

It said the lower contribution from LRT3 PDP JV was due to scaling down and extension of construction timeline for LRT3.

“LRT3 has been restructured to a fixed price contract with contract sum of RM11.9 billion.

“Construction is anticipated to resume in 2H19. Cut FY19-21 earnings by 7.6%, 13.0% and 6.2% respectively after imputing higher operating expenses.

“Maintain Hold rating with lower target price of 97 sen (from RM1.27) following earnings cut, balance sheet update and adjustment of PE multiple ascribed to metering segment to 8x (from 10x),” it said.