KUALA LUMPUR (May 18): Cahya Mata Sarawak Bhd (CMS) posted a 7.42% drop in net profit for the first quarter ended March 31, 2022 (1QFY22) to RM72.02 million, from RM77.8 million a year ago, despite an improvement to its quarterly revenue.

The group’s filing on Wednesday (May 18) showed that its quarterly revenue had climbed 5.93% to RM214.04 million in the quarter under review versus RM202.06 million in the previous corresponding quarter. 

The group attributed the lower net profit to higher tax expenses recognised in relation to higher taxable income from its divisions.

It noted that its 1QFY21 earnings also included one-off gains from the disposal of Kenanga Investment Bank Bhd (KIBB) shares — amounting to RM28.52 million — and disposal of land and investment properties — amounting to RM16.99 million.

Meanwhile, CMS attributed the improved revenue to higher revenue contributions from its cement and road maintenance divisions of 7% and 36% respectively.

It said its cement division posted a revenue of RM136.64 million in 1QFY22, 7% higher than the RM128.17 a year ago, which was carried by an increase in demand.

The group said its road maintenance division reported a 36% surge in revenue to RM36.31 million from RM26.73 million, due to a revenue adjustment of RM6.92 million recognised for routine road maintenance works.

On its prospects, the group said it expects improved performance across all of its divisions, in line with the Federal and Sarawak state government’s increased development expenditure, which is expected to lift the construction segment and its related industries.

However, the group takes a longer-term view that projects will continue albeit with delays, adding that it has been proactive in ensuring it overcomes the current situation.

“Our cement division has embarked on new cost efficiency initiatives to help cushion the impact of the increased materials costs for its products. The construction and trading division continues to push its products out to the market to keep the momentum of business on a strong footing,” it added.

Meanwhile, in a separate statement, CMS said phase 1 of its integrated phosphate complex is still under construction in 1QFY22 and is scheduled for commissioning in 3QFY22.

CMS’ shares closed unchanged at RM1.09 on Wednesday, giving the group a market capitalisation of RM1.17 billion.