This article first appeared in The Edge Financial Daily on February 19, 2020

KUALA LUMPUR: KKB Engineering Bhd’s net profit surged 2.66 times to RM20.27 million for the fourth quarter ended Dec 31, 2019 (4QFY19) from RM7.61 million a year ago, on an improved margin on the engineering and manufacturing sectors’ higher revenue.

This resulted in higher earnings per share of 7.86 sen for 4QFY19 compared with 2.95 sen for 4QFY18.

Its revenue for the quarter also rose 9.5% to RM156.03 million from RM142.54 million a year ago, on a higher revenue recognition from the civil construction and steel pipes manufacturing divisions within the engineering and manufacturing sectors.

KKB Engineering is recommending a first and final dividend of six sen per share for FY19 at its forthcoming annual general meeting.

The better quarterly performance lifted the group’s FY19 net profit by 2.7 times to RM48.31 million from RM17.64 million for the previous year, while revenue grew 35.5% to RM559.03 million from RM412.48 million.

KKB Engineering said demand for steel water pipes is expected to remain firm, buoyed by ongoing and upcoming water-related infrastructure projects planned under the Sarawak Water Supply Grid Programme.

“With the existing contracts in hand and the group’s diverse portfolio of businesses, coupled with a healthy financial position, the board remains optimistic that its engineering and manufacturing sectors will perform favourably towards a sustainable growth for FY20, barring unforeseen circumstances,” it added.

However, KKB Engineering warned that uncertainties in the global economic environment, the ongoing Covid-19 outbreak, escalating costs due to inflationary pressure, volatile global raw material steel prices and fluctuating exchange rates are among factors that may impact its performance.