Kelington 1Q2024 net profit rose 53.3% to RM24.8 million, declares dividend of 2 sen

KUALA LUMPUR: Integrated engineering solutions provider, Kelington Group Berhad today posted the Group’s profit attributable to shareholders (net profit) rose 53.3% to RM24.8 million for the first quarter ended March 31, 2024 (1Q2024) from RM16.2 million in the prior year (1Q2023).

Concurrently, the Group’s revenue climbed 10% to RM339.3 million, compared to RM308.9 million in 1Q2023. The growth in top and bottom-line performance was attributed to the significant growth in revenue contribution across key operating markets, notably Malaysia (+6%) and China (+129%), accounting for 45% and 31% of total revenue in 1Q2024 respectively.

In terms of business segments, the Ultra High Purity (UHP) division remained the primary revenue contributor, accounting for 61% of the Group’s total revenue in 1Q2024. Compared to the same quarter last year, UHP division revenue rose by 12% to RM205.5 million, driven by the

awarding of several large UHP projects in the second half of 2023.

Meanwhile, revenue from the Process Engineering division stood at RM21.4 million, which made up 6% of Kelington’s 1Q2024

total revenue.

The General Contracting division contributed revenue of RM78.4 million which represents a 21% year-on-year (YoY) increase, underpinned by increased project recognition and a project undertaken in Kuching. The Industrial Gases division continued its upward performance in 1Q2024 as revenue jumped 47% YoY to RM35.9 million, driven by elevated demand for liquid carbon dioxide (LCO2) from Oceania countries.

Commenting on the Group’s financial performance, CEO Raymond Gan said, “Since the start of the year, the Group has secured RM235.0 million worth of contracts as of March 31, 2024. Including carried forward projects from prior years, our total order book now stands at RM1.54 billion, with RM1.25 billion remain outstanding as of 31 March 2024.”

He added that the commencement of operations at their second LCO2 plant in March 2024 has doubled their total annual production capacity to 120,000 tonnes.

“We are optimistic that this expanded capacity will strategically position us to meet the growing demand both locally and internationally. This is particularly significant amidst the global LCO2 shortage, which has been fueled by the shutdown of petrochemical plants due to environmental considerations,“ he said.

As of March 31, 2024, the Group’s gearing ratio improved to 0.44. Total borrowings decreased to RM166.6 million from RM188.2 million as of Dec 31, 2023, primarily due to debt repayments in Malaysia and Singapore. Kelington maintains a healthy balance sheet with a net cash position of RM135.5 million as of 31 March 2024. This significant increase in net cash from RM81.0 million as of 31 December 2023 is largely due to debt repayments and proceeds from the near completion of several large projects.

The Board of Directors of Kelington has proposed a first interim tax-exempt dividend of 2 sen per ordinary share for the financial year ending Dec 31, 2024, amounting to RM13.3 million.