KUALA LUMPUR (Aug 26): Cahya Mata Sarawak Bhd's (CMS) net profit slid 3.11% to RM16.71 million for the second quarter ended June 30, 2020 (2QFY20) from RM17.2 million posted for the preceding quarter, underpinned by a 26.77% decline in revenue to RM206.84 million, from RM292.45 million.

The extended Movement Control Order (MCO) period eroded contributions from all its divisions, it said in a Bursa filing today.

Earnings per share (EPS) likewise took a hit, slipping to 1.56 sen from 1.61 sen in the previous quarter.

However, CMS said it also received higher profit contributions from its associates during the quarter. "[Telecommunications infrastructure provider] Sacofa Sdn Bhd and [financial services group] Kenanga Investment Bank Bhd being essential businesses, remained open and operational during the lockdown period," it said.

On a yearly basis, however, its net profit plunged 59.58% to RM16.71 million, from RM41.33 million (EPS: 3.85 sen) in 2QFY19, as its core businesses were hit by the MCO. However, this was partially offset by a 66% increase in contributions from its associates, to RM20.5 million from RM12.4 million a year ago.

Quarterly revenue fell 48.18% year-on-year to RM206.84 million from RM399.17 million.

Following the reduced 2Q earnings, the group's cumulative six-month (6MFY20) net profit declined 58.6% to RM33.99 million from RM82.10 million in 6MFY19, with revenue sank 40.14% to RM489.29 million against RM817.35 million.

In a separate statement, its group managing director Datuk Isaac Lugun said in 2QFY20, the lockdown caused all of CMS' core businesses to have shorter operating days, just like many other businesses.

"Lower revenue coupled with fixed costs, in particular overhead cost, resulted in softer 2QFY20 results."

On the group's prospects, Lugun said despite the temporary setback from the pandemic and the resulting MCO, the group is cautiously optimistic of better performances in the coming quarters, especially with all its traditional core businesses back in full swing to catch up with pending orders and works that were halted during the quarter.

Meanwhile, he said the group has also taken prudent steps to enhance its cost control initiatives including managing and rationalising capital expenditure.

"Furthermore, we believe that the incoming mega infrastructure projects in Sarawak will bode well for our traditional core businesses especially the cement, construction materials and trading and construction and road maintenance divisions. We will continue to leverage on our local knowledge and experienced management team to maximise our participation in the Sarawak growth story," he added.

The stock closed one sen or 0.67% up at RM1.50, valuing it at RM1.61 billion. Some 3.79 million shares were done. Despite the stock having rebounded from its March low of 88 sen, it is still down by 34% year-to-date, when it was traded at RM2.27.

Edited by Lam Jian Wyn