Friday 29 Mar 2024
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KUALA LUMPUR (Nov 26): Cahya Mata Sarawak Bhd (CMSB)’s net profit dipped 7% to RM72.83 million or 6.79 sen per share in its third-quarter ended Sept 30, 2019 (3QFY19), from RM78.02 million or 7.29 sen per share a year ago, as cost of sales grew while other income fell.

Cost of sales grew 3% to RM371.29 million from RM362.13 million, while other income retreated 63% to RM3.67 million from RM10.02 million. Revenue was flat at  RM467.18 million, versus RM465.17 million in the year-ago.

Following the reduced 3Q earnings, the group's cumulative nine-month (9MFY19) net profit fell 26% to RM154.93 million from RM208.62 million from 9MFY18, despite revenue rising 6% to RM1.28 billion from RM1.22 billion.

Cahya Mata said the lower profit for 9MFY19 was mainly attributed to weaker profits reported by the group’s associate company OM Materials (Sarawak) Sdn Bhd, due to the depressed commodity market.

In addition, Cahya Mata’s cement, construction & road maintenance and property development divisions reported lower profits during the 9MFY19 period, the group said in a statement today.

“From its associates, the group recorded a share of profit of RM55.80 million in 9MFY19, lower by 44% than 9MFY18’s profit of RM99.20 million. This was mainly due to the significantly lower contribution by OM Materials (Sarawak) Sdn Bhd, CMSB’s 25%-owned associate company. The lower profit by OM (Sarawak) was due to the recent weak commodity prices and the ongoing global trade-war which has been impacting the entire industry,” it explained.

On prospects, although prospects for OM Material (Sarawak) in the immediate-term remain challenging due to macro-economic factors, the group remains confident on its longer-term prospects, due to its position in the first quartile of the global production cost curve and its strong global presence.

“Once the market rebounds, as forecasted from the second half of 2020 onwards, we are confident that OM Materials (Sarawak) will again post stellar financial performance as it did in 2018.”

“The group is also confident on continuing growth from its other associate companies including SACOFA Sdn Bhd, KKB Engineering Berhad and Kenanga Investment Bank Bhd, which are part of our growth strategy for our strategic investments to drive the next wave of growth. The aim of this growth strategy is for our traditional core businesses and our strategic investments to counter-balance each other and in the long-term, to equally contribute to double the group’s earnings,” said Datuk Isaac Lugun, managing director at Cahya Mata.

On its core businesses, Isaac said the group expects future growth to be driven by the ongoing Pan Borneo Highway project and the state government’s increased spending on infrastructure, despite the current challenging business environment.

Cahya Mata shares closed unchanged at RM2.35 today, bringing a market capitalisation of RM2.52 billion. The counter saw some 687,000 shares done.

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