With a steady pipeline of jobs premised on its outstanding order book of more than RM550 million, KKB will be able to sustain its performance in FY24.
KUCHING (Feb 23): KKB Engineering Bhd (KKB) ended the financial year 2023 (FY23) on a strong note with its earnings visibility up to FY25 buoyed by its RM550 million orderbook, analysts observed.
In a note, the research team at MIDF Amanah Investment Bank Bhd (MIDF Research) said: “With a steady pipeline of jobs premised on its outstanding order book of more than RM550 million, we opine that KKB would be able to sustain its performance in FY24.
“We can also expect the group to be among the beneficiaries of the various development plans that are in store for Sarawak, backed by the allocations and initiatives under Budget 2024 and the Mid-Term Review of the 12th Malaysia Plan, on top of other oil and gas related jobs the group is bidding.”
It also noted that the group is actively participating in tenders, with a current tender book level of more than RM290 million and will be actively pursuing more projects, comprising water supply and energy related jobs.
On its performance for FY23, MIDF Research said, KKB registered a core net profit of RM26.3 million for FY23, an improvement of 89.9 per cent, driven by better results from both its engineering and manufacturing divisions.
Revenue from the engineering segment grew 19.1 per cent to RM445 million for the year while its PAT surged 65.8 per cent to RM32.4 million.
Among factors were due to higher progress billings from the construction division and higher revenue from steel fabrication, where the group is involved in major onshore fabrication jobs for oil and gas facilities, especially the engineering, procurement and construction (EPC) of standard wellhead platforms for MNLG FaS and the fabrication and supply of steel structures for Malaysia Rosmari and Marjoram onshore gas plant project in Bintulu, both projects from Sarawak Shell.
“These projects are expected to continue contributing positively to the group’s FY24,” the research team said.
As for its manufacturing segment, revenue rose 97.3 per cent y-o-y to RM25.9 million, while its bottom line rebounded to a PAT of RM1.9 million from a loss after tax of -RM1.1 million in FY22.
“This came mainly from the steel pipes manufacturing division, which has maintained its RM6.0 million of revenue for two consecutive quarters,” it added.
