KUALA LUMPUR (May 21): KUB Malaysia Bhd aims to turn a profit for the financial year ending Dec 31, 2019 (FY19).
Speaking to reporters at its annual general meeting (AGM) here today, KUB president and managing director Datuk Abdul Rahim Mohd Zin (pictured) said the group is aiming to be back in the black for FY19, thanks to efficiency enhancement, cost-cutting and right-sizing measures.
However, he said KUB's earnings will be dependent on the price of crude palm oil and the disposal of an oil palm mill in Sarawak, which will be the group's only asset sale for this financial year.
The group saw an FY18 net profit of just RM1.77 million, plunging from RM32.4 million in FY17, despite a relatively marginal decrease in revenue — full year revenue stood at RM480.1 million, from RM498.1 million in the prior year.
The group's agro segment saw a topline contribution of 5.3% in FY18, according to its annual report.
Abdul Rahim said the group was reviewing its options to expand this segment.
Meanwhile, he also said the sale of the palm oil mill is expected to help reduce its gearing level, which stands at 0.54 times according to its FY18 annual report, from 0.17 times in the year before.
He added that the group is looking at re-setting its targets and will submit its plans to reduce its gearing levels to the board.
Abdul Rahim added that for FY19, the group is aiming to invest RM40 million to RM50 million as capital expenditure.
In terms of its order book, the group's subsidiary KUB Telekomunikasi Sdn Bhd has an order book of RM80 million which will last until 2021, while its subsidiary KUB Power Sdn Bhd has an order book of RM15 million for the next year and a half.
Meanwhile, the group's tender book of RM120 million is for FY19, and it would likely begin awarding contracts by the middle of FY20, said Abdul Rahim.