KUALA LUMPUR (Aug 22): Kerjaya Prospek Group Bhd is on track to achieve RM1 billion revenue this year as construction activities normalise, but any further upside is capped by ongoing labour shortages, said non-independent non-executive chairman Datuk Tee Eng Ho.
“[To achieve] RM1.2 billion is a bit tough, because we do not have enough workers,” said Tee when asked if the group would aim for higher revenue given that it recorded almost RM600 million in turnover in the first half of this year.
The construction firm currently hires over 2,000 foreign workers, versus its requirement of at least 4,000 as its manpower, said Tee in a media briefing after the group released its quarterly results on Monday (Aug 22).
Kerjaya Prospek is in the midst of bringing in about 280 migrant workers from Nepal, of which 100 have arrived in Malaysia, said Tee, adding that the government has approved another a 500-strong headcount for the group.
“[For the] next batch, we are targeting another 1,500 [people],” he said.
For the first half ended June 30, 2022 (1HFY22), the group registered a net profit of RM57.4 million, up 35% year-on-year from RM42.39 million, on stronger revenue, which grew 26% to RM577.51 million as construction activities normalised, from RM458.56 million for the previous corresponding period.
In terms of the bottom line, Tee said net profit may reach the RM100 million mark, assuming the group manages to maintain its “high-single-digit or low-double-digit” margin, and subject to the effect of Cukai Makmur, a one-off prosperity tax on earnings above the RM100 million threshold.
Tee expects Cukai Makmur for Kerjaya Prospek to be around RM1 million this year.
Although raw material and labour costs are likely to stay elevated as compared to pre-pandemic levels, Tee said the group is still capable of sustaining its current profit margin as new jobs are all quoted at a higher rate to reflect higher operating costs.
“All developers adjusted their prices, easily by 20%. [For ongoing projects], we signed [with previous rates] already, but new jobs are all quoted at new rates,” he said, adding that the group’s new tenders had already taken into consideration a weaker ringgit, higher labour wages and raw material prices.
Hence, Tee, who owns a 72% stake in Kerjaya Prospek, said the group would potentially pay more dividends for the remainder of FY22.
“For the past six months, we have already declared three sen [per share. We] will declare more dividends, because the cash flow coming in is very strong,” he said.
Nonetheless, Tee said the management is not revising the job replenishment target of RM1.5 billion this year, despite the fact that total contract wins year-to-date have reached RM1.33 billion.
Tee said Kerjaya Prospek may see another “one or two more projects coming in” for the remainder of FY22, but declined to reveal more details.
The group’s current tender book stands at RM1.5 billion to RM2 billion.