KUALA LUMPUR (Nov 25): KUB Malaysia Bhd's net profit fell 39.1% to RM2.37 million for the third quarter ended Sept 30, 2014 (3QFY14) from RM3.9 million a year ago, on higher income tax expense and lower contribution from its energy, food, properties, engineering and construction (PEC) and others segments.

Revenue for the quarter fell 20.6% to RM171.34 million, from RM215.77 million in 3QFY13.

For the nine months ended Sept 30, 2014 (9MFY14), net profit dropped 20.2% to RM5.71 million from RM7.15 million a year ago, while revenue was 23.8% lower at RM517.41 million.

In a filing with Bursa Malaysia today, KUB said despite its lower revenue for 9MFY14, profit before tax (PBT) has improved by 10.7% to RM14.2 million from RM10.7 million a year ago, as a result of improved gross profit margin particularly by its agro and information and communication technology (ICT) sectors.

“Higher FFB [fresh fruit bunches] price, higher yield per hectare and lower cost of production in the agro sector and a revision of cost in the ICT sector have contributed to the (PBT) improvement,” it added.

KUB said its food sector’s revenue declined by 11% to RM32.93 million in 9MFY14, mainly due to administrative expenses associated with the cessation of its hotel business at the end of last year.

“For A&W Malaysia, the group foresee a potential for this business to grow further, hence its intention to increase the market share by opening more outlets,” it said.

Meanwhile, its PEC segment posted a loss of RM804,000 in 9MFY14, mainly contributed by the lower revenue for the current period as there were no “big projects” undertaken as compared to the preceding year, citing the klia2 project and the construction of a power substation in Johor Baru.

However, it said KUB Precast Sdn Bhd, which manufactures industrialised building system (IBS) elements has managed to generate profit for the nine-month period.

It believes that with “aggressive marketing and effective management of resources”, KUB Precast is expected to significantly contribute to the profitability of the group.

“The group continues to operate in a competitive business environment and will continue to focus on strengthening the group’s current business, broadening customer base and continue to seek new business opportunities to enhance its profitability,” it added.

KUB shares closed 2 sen or 3.85% higher at 54 sen today, bringing it to a market capitalisation of RM300.49 million.