According to KKB, its tender book for all engineering and construction, manufacturing and O&G segments combined amounted to approximately RM340 million.
KUCHING: KKB Engineering Bhd’s (KKB) results for the financial year ending 2021 (FY21) is expected to be supported by the current orders in hand and the on-going construction works for water related projects, other related infrastructure works implemented under the Sarawak Water Supply Grid Programme, the on-going major onshore fabrication jobs for the oil and gas (O&G) facilities and the Pan Borneo Highway project in Sarawak.
In its brief recap KKB management highlighted that as at end March 2021, group order book is at approximately RM650 million currently, with progressive billing until the end of 2022 or early 2023.
According to KKB, its tender book for all engineering and construction (E&C), manufacturing and O&G segments combined amounted to approximately RM340 million.
However, management noted that as at end March until May 18, there has been an additional RM100 million, which should amount to a total of RM440 million.
The final number is expected to be known by the second half of 2021 (2H21).
On major new water supply projects over next two years, the group will focus on bids worth appro RM710 million and expected to submit during 2H21.
“The success rate targeted is up to 40 per cent – if successful may be awarded sometime 1H22 latest,” management said.
On KKB’s O&G segment, management also highlighted that under the concept of Design One Build Many (D1BM), major production sharing contracts (PSCs) are expected to roll out new invitation to bids (ITBs) during 2H21. The group will focus on bidding up to seven projects (mostly Sarawak or Sabah water).
“With May crude oil now average above US$65 per barrel, barring further geo-political tensions, most projects highlighted in the current Petronas Activity Outlook would appear to on track.”
However, KKB said that the widespread worsening Covid-19 pandemic and Movement Control Orders will continue to impact on all projects or productions, adding that delays caused thus far has been mitigated with ongoing Extension Of Time applications, contract reviews and others.
In general 2020 the average three to six months of additional time delays and costs are expected in 2021. This includes supply chain, transportation or shipment disruptions or a spike in costs and raw materials globally.
As of end March 2021, the group’s cash amounted to RM152 million.
The 45th Annual General Meeting (AGM) has been postponed to June 28. On the four sen dividend for FYE 2020, the Entitlement and Payment will be subjected to Shareholders Approval at AGM.
To note, the group’s resources now total around 850 headcounts and the safety and welfare of all KKB staff remains the group’s utmost priority.
“Human Resource and Safety monitoring and tracking by the week of all personnel and standard operating procedures (SOPs) are being managed closely.”
To recap, KKB’s pre-tax profit for the current quarter ended March 31, 2021 (1Q21) improved by 6.5 per cent to RM13.2 million compared to RM12.4 million recorded in the preceding year first quarter, despite recording a lower revenue in the current quarter.
KKB’s current quarter revenue of RM99.7 million, down from RM108.2 million in 1Q20, decreased by 7.8 per cent compared to the preceding year corresponding first quarter, mainly due to lower revenue registered by the group’s steel pipes manufacturing division.
“The group’s overall improved bottom line was mainly attributable to the improved gross profit margin of the engineering sector, in particular the steel fabrication division on the back of higher revenue registered in the current quarter.”