Kgb Latest QR Summary

Here is a summary of Kelington Group Berhad's (KGB) Q3 2024 performance:

Financial Performance

Revenue: KGB’s revenue declined by 24% for the quarter, reaching RM307.3 million, and dropped by 15% over the first nine months compared to the same period last year. The decrease stemmed mainly from major project completions in Singapore and Malaysia.

Profit: Despite the revenue decline, profit before tax increased by 9% for the quarter and 28% year-to-date, largely due to improved gross profit from a favorable project mix and strong Industrial Gases division performance.

Earnings per Share (EPS): Basic EPS rose to 12.66 sen for the cumulative period, reflecting increased profitability.

Segmental Performance

Ultra-High Purity (UHP): While revenue fell by 13% in Q3, UHP still made up 70% of total revenue, with higher margins contributing positively to the bottom line.

Industrial Gases: Saw a 31% increase in revenue year-over-year, driven by demand for liquid CO₂ and the expansion of production capacity to 120,000 MT/year in Kerteh.

Geographical Breakdown: Malaysia, Singapore, China, and Taiwan remain the top contributors, with Malaysia and Singapore seeing declines as projects conclude, while revenue from China rose due to new UHP projects.

Financial Position

Assets and Cash Flow: KGB’s net cash position improved significantly to RM185 million, with reduced debt-to-equity gearing (0.41). Strong cash flow from operations is offset by capital expenditures in Industrial Gases.

Dividends: KGB declared multiple dividends totaling RM43.8 million, which has been a consistent return for shareholders.

Prospects

KGB’s strong position in semiconductor engineering aligns with industry growth in Asia, especially China, driven by increased semiconductor production demands. The company’s large order book (RM2.3 billion) with RM1.45 billion outstanding provides visibility into future revenue streams.

⚠️ Conclusion

KGB’s robust profitability, cash position, and strong order book indicate a stable outlook despite near-term revenue headwinds from project completions. The Industrial Gases segment and UHP demand in China position KGB for growth, making it a potentially attractive investment for long-term investors seeking exposure to the semiconductor and industrial gases sectors.