KUCHING: KKB Engineering Bhd has reported a significant drop in group after-tax profit to about RM8.1 million in second quarter ended June 30, 2025 (2Q2025) as compared to RM11.5 million in 2Q2024 as group revenue plunged by nearly 50 per cent to RM55.6 million from RM109.2 million.
The lower group turnover was attributed mainly to the weak performance of the steel fabrication and civil construction businesses although the steel pipe manufacturing business had done well.
However, group net profit improved to RM7.1 million (2Q2024:RM3.4 million), boosting earnings per share to 2.46sen from 1.18sen.
In the current quarter under review, the engineering sector contributed RM32.4 million (2Q2024:RM104.6 million) to KKB group revenue while the manufacturing sector chipped in higher sales of RM23.1 million (RM4.6 million).
KKB attributed the weak performance of the engineering sector to the completion of major projects for both the construction and steel fabrication divisions.
The steel fabrication division saw its revenue fell to RM13.6 million (2Q20214:RM71.2 million) or down by 80.9 per cent on the back of lower progress billings. The two projects its subsidiary firm OceanMight Sdn Bhd undertook for Sarawak Shell Bhd and Samsung E&A Engineering Sdn Bhd are at their tail end.
Similarly, the civil construction division reported sharply lower revenue of RM18.7 million (RM32.1 million).
The manufacturing sector performed relatively well as its revenue surged to RM23.1 million (RM4.6 million), contributed mainly by the steel pipes manufacturing division with its revenue soared to RM21.3 million (RM4.2 million) supported by increased turnover from the manufacturing plant in Sabah.
The current quarter revenue came mainly from the supply of mild steel concrete lined pipe and fittings to Sabah, and to the Salim water treatment plant in Sibu as well as the Serian regional water supply Phase II (stage 2) project.
The LP gas cylinders manufacturing division also reported higher revenue of RM1.8 million (RM381,000), boosted by the supply of new and reconditioning/requalification LPG cylinders.
As compared to the immediate preceding quarter (1Q2025), KKB did well in the current quarter by returning to the black with after-tax profit of RM8.1 million (1Q2025:-RM3.14 million) in line with revenue growth to RM55.6 million (RM45.1 million) or up by 23.1 per cent.
The revenue growth was contributed by the steel pipes and LPG cylinders manufacturing divisions within the manufacturing sector which saw its revenue shot up to RM23.1 million from RM7.4 million in 1Q2025.
“Similarly, group pre-tax profit increased by 346.3 per cent to RM10.4 million against a pre-tax loss of RM4.2 million in 1Q2025 on the back of improved performance from both the engineering and manufacturing sectors, and lower finance cost as compared to 1Q2025,” KKB said in explanatory notes to its financial results.
In first half 2025 (1H2025), KKB group after-tax profit declined to RM5.74 million (1H2024:RM7.2 million) as revenue shrank to RM100.7 million (RM259.6 million).
The engineering sector turnover fell to RM70.2 million (RM246.5 million) but the manufacturing sector delivered higher revenue of RM30.5 million (RM13.1 million).
On prospects going forward, KKB said as the group did better in 2Q2025 than 1Q2025, it is determined to build on this momentum and continue its efforts to increase order book, and align its business plans and strategies to remain robust and competitive.
“The group, however, maintains its cautious outlook on performance of its engineering sector, particularly the steel fabrication division, which also supports the major onshore fabrication for the oil and gas facilities with slower contracts roll-out by major oil companies in 2025.
“The group continues to look out for more projects in collaborations with strategic partners and to seek new business opportunities to expand the group’s income stream and sustainability of our core business,” added the company.
KKB said with major projects being delivered last year and early 2025, the group is expected to see a reset of its activities this year.
Notwithstanding, its board of directors and management remain positive that the group will perform favourably although it is expected to deliver lower revenue and profit for FY2025.
“Our diverse portfolio of businesses coupled with the group’s healthy financial position will provide us with the resilience to mitigate the adverse effects under the prevailing competitive and challenging business environment,” said KKB.
