KUALA LUMPUR (Sept 24): George Kent (Malaysia) Bhd's net profit more than halved to RM11.05 million in the second financial quarter ended July 31, 2019 (2QFY20) from RM24.58 million a year ago, on lower contributions from all segments.

This resulted in a lower earnings per share of 2.1 sen for 2QFY20, compared with 4.4 sen for 2QFY19.

Quarterly revenue also fell 13.5% to RM97.72 million, from RM112.93 million a year ago.

In a bourse filing today, George Kent said the engineering segment profit of RM17.03 million for 2QFY20 was 41% year-on-year (y-o-y) lower, mainly due to lower revenue.

"Construction accounts for 95% of the revenue and 96% of segment profit of the engineering division," it added.

The metering segment profit of RM4.33 million, meanwhile, was 33% y-o-y lower in 2QFY20, mainly due to the lower sales and gross profit margin in the quarter under review.

Despite the weak quarterly results, George Kent declared an interim dividend of 1.5 sen per share for the financial year ending Jan 31, 2020 (FY20), payable on Oct 31.

For the cumulative six months (1HFY20), the group saw net profit drop 46.7% to RM24.56 million from RM46.12 million, while revenue fell 15.1% to RM180.5 million from RM212.7 million in 1HFY19.

The group mainly derives its revenue from Malaysia, other Asean countries, Hong Kong and Papua New Guinea. Its core businesses are centred in the water industry and engineering works.

In a separate statement, George Kent said the metering division's results are expected to improve in the second half of FY20, as export orders that were anticipated for the first half of the year are realised.

"The Selangor state water authority in September had awarded a contract to the group to supply, deliver and install 5,540 water meters fitted with the group’s smart metering solution for a six-month pilot test. This pilot project is a key stepping stone in the commercialisation of the group’s smart metering solution in the coming years," it said.

“These initiatives are positive steps taken to expand the metering business contribution to 50% or more of the group’s earnings, in line with the group’s long-stated strategic plan to broaden its income base," George Kent chairman Tan Sri Tan Kay Hock said.

George Kent also said it will accelerate growth by substantially increasing its investments in water-related projects or concessions through mergers and acquisitions and strategic partnerships. "George Kent aims to turn these investments into its main income contributor in the medium- to long term."

George Kent shares closed down one sen or 0.95% at RM1.04 today, with 348,000 shares done, bringing a market capitalisation of RM585.8 million.