George Kent ‘fortunate’ for not getting into O&G

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KUALA LUMPUR: George Kent (Malaysia) Bhd deemed itself “fortunate” for not jumping into the oil and gas (O&G) market, which is now facing a slump in oil prices.

“I think we can consider ourselves fortunate for not venturing into the O&G business, given that the industry is now not conducive,” its executive director Bernie Ooi Chin Khoon told a news conference yesterday to announce the group’s financial results for the fourth quarter ended January (4QFY15).

George Kent chairman Tan Sri Tan Kay Hock had in August last year said the group was looking to diversify its presence into the O&G sector.

Brent crude oil is now hovering at US$59 (RM216.53) a barrel.

Ooi also clarified that its joint venture (JV) partner Lion Pacific Sdn Bhd is still involved in one of the work packages for the Ampang LRT Line Extension.

Market talk is that the engineers who are conducting the system works for the Ampang LRT Extension are from CMC Engineering Sdn Bhd, and not Lion Pacific.

George Kent (fundamental: 2.1; valuation: 2.4) had in August 2012 won the RM955.84 million system works contract in a JV with Lion Pac, from Prasarana Malaysia Bhd.

During the briefing, Ooi conceded there was a dip in the group’s 4QFY15 net profit, but said George Kent is in the midst of bidding for other contracts.

“One of them is the RM9 billion LRT Line 3 project delivery partner (PDP) contract, which we are tendering with MRCB (Malaysian Resources Corp Bhd),” he said.

George Kent saw its 4QFY15 net profit fall 55.23% year-on-year to RM8.28 million, from RM18.48 million a year ago.

Asked whether the George Kent-MRCB JV as reported by The Edge weekly on March 23, 2015 was one of the six shortlisted PDP companies, Ooi neither confirmed nor denied it.

The Edge weekly reported that George Kent was one of the six shortlisted candidates for the role of PDP by Prasarana for the development of the proposed LRT 3 project.

George Kent shares closed unchanged at RM1.27 yesterday, giving it a market capitalisation of RM390.53 million.

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This article first appeared in The Edge Financial Daily, on March 27, 2015.