This article first appeared in The Edge Financial Daily, on June 21, 2016.

KUALA LUMPUR: Piling specialist Ikhmas Jaya Group Bhd, whose financial year ending Dec 31, 2016 (FY16) started off with a 49.3% slump in earnings in the first three months ended March 31, 2016 (1QFY16), is not worried about its prospects for the remainder of the year as it believes it will benefit from the country’s infrastructure boom.

Hence, despite the lacklustre first-quarter performance, the group is expecting a better FY16, with a strong double-digit earnings growth, on the back of a RM400 million revenue.

“We are trying hard to procure more projects and achieve RM400 million turnover this year,” group managing director Datuk Ang Cheng Siong, who sees more local construction projects being rolled out this year, told reporters after the group’s annual general meeting yesterday.

Ang also explained that the sluggish 1QFY16 was primarily due to the “timing” of projects, adding that earnings and revenue should see upticks in 2QFY16.

The group saw its net profit slump to RM4.31 million in 1QFY16, from RM8.49 million in the same period a year ago, after posting a lower revenue of RM51.1 million, down 33.1% from RM76.3 million in 1QFY15.

Last year, the group recorded a revenue of RM268.66 million, down 8.5% from FY14’s RM293.5 million, while net profit came in at RM24.3 million, up 13.6% from the RM21.4 million it achieved in FY14.

The group will be tendering for about RM8.9 billion local construction projects this year, from which it expects to secure at least 6% worth of jobs, based on its record, said Ang.

“We hope to get one or two packages this year. The projects’ values range from a few hundred millions to a billion,” Ang said.

Among the projects that the group is bidding for are expressway infrastructure works, namely the Damansara-Shah Alam Highway, the Shah Alam-Ulu Klang Expressway, the Duta-Ulu Klang Expressway 3 and the Pan Borneo Highway in Sarawak. These are all expected to be awarded in stages starting June this year.

The group’s projects in hand now stand at RM1.15 billion, with an outstanding order book of RM700 million, which is likely to sustain the group’s earnings for the next two years.

Ang also said the group is looking for opportunities to participate in the foundation works of the Bandar Malaysia’s project.

Meanwhile, though the group’s 1QFY16 net profit margin slid 2.7 percentage points year-on-year to 8.43%, from 11.13%, Ang believes the management will be able to maintain margins at high single digits for the rest of the year.

“The market is very competitive as the private sector is slowing down slightly,” said Ang, adding that Ikhmas Jaya is open for partners and opportunities in new areas — such as track laying — to enhance the group’s competitiveness.

Ikhmas Jaya, which was listed in July last year — with an initial public offering price of 57 sen — was unchanged at 70.5 sen yesterday. The counter, which peaked at 80 sen on May 17, has declined 11.88% over the past month.