KUALA LUMPUR (April 28): Cement maker Tasek Corp Bhd's net profit slipped 3.8% to RM22.67 million in its first quarter ended March 31, 2016 (1QFY16) from RM23.57 million last year, largely on lower interest income and contribution from an associated company.
Its interest income of RM2.4 million for 1QFY16 was lower compared to RM2.9 million last year because of lesser amount of funds placed on term deposits, while the share of profit from the associate fell 76.6% on lower volume of sales and higher cost.
Revenue for the quarter, however, rose 3% to RM171 million from RM166 million a year ago, as revenue from its cement and concrete segments improved, according to its bourse filing.
The cement segment registered a higher operating profit of RM25.4 million in 1QFY16 on net revenue of RM137.6 million compared with 1QFY15's operating profit of RM24.9 million on net revenue of RM133 million.
Despite the increase in revenue, the continuing price competition in the domestic market had partly affected the segment's profitability during 1QFY16, it noted.
As for the concrete segment, it saw a higher operating profit of RM1.35 million in 1QFY16 on net revenue of RM57.3 million from 1QFY15's operating profit of RM1.25 million on net revenue of RM54.5 million, mainly due to higher sales and improved sales margin.
Moving forward, the outlook for the domestic construction sector for the second quarter of 2016 is expected to be promising, it said.
"The announced public transport infrastructure development such as the Klang Valley MRT Line 2, LRT Line 3 and some highway projects are expected to contribute to demand for cement and ready-mixed concrete in the second half of the year.
"In the Klang Valley region, announced private sector projects such as the Bukit Bintang City Center (BBCC), KL118, TRX and Bandar Malaysia are expected to further help support the construction sector growth when implemented," Tasek said.
At 2.56pm, Tasek shares remained unchanged at RM15.62 on thin trade of 100 shares done, valuing it at RM1.98 billion.