Ahmad Zaki's 2Q net profit down 36%

KUALA LUMPUR (Aug 26): Ahmad Zaki Resources Bhd (AZRB)'s net profit fell 36% to RM6.21 million or 1.28 sen per share for the second quarter ended June 30, 2016 (2QFY16), from RM9.63 million or 1.99 sen per share a year earlier.

The softer performance was despite a 70% improvement in quarterly revenue to RM264.05 million from RM155.57 million in the previous year.

The group declared a single tier interim dividend of 2 sen per share for the financial year ending Dec 31, 2016.

In its filing with the exchange, AZRB attributed the better top-line performance to higher progress for certain projects under its construction business, as well as additional new awards during the quarter.

However, the lower profit for the quarter was due to the high-base effect, as the group recorded higher operating income in 2QFY15.

For the six months ended June 30, 2016 (1HFY16), net profit stood 20% lower at RM10.41 million compared to the previous year's RM13.01 million, while revenue soared 86% to RM573.42 million from RM308.62 million.

"The group's construction division remaining orderbook balance as at the end of 2QFY16 stands at RM4.36 billion. We are positive on our prospects of adding to and enhancing the orderbook.

"Therefore, the construction division is confident to give continued strong performance in future quarters," said AZRB.

Meanwhile, its oil and gas division is expected to remain steady amid the weak crude oil price environment, while contribution from its plantation segment is expected to improve, supported by better yields and implementation of stringent cost controls.

For its property division, the group said it is planning and embarking on several residential projects, slated for launching in 2016 and 2017. These projects are expected to drive positive contributions from the property division.

"As at the end of 2QFY16, the division has development projects with an estimated gross development value of RM1.4 billion. The facilities management business under the property division has started to contribute a steady flow of income upon commencement of the asset management services of IIUM Medical Centre during 2QFY16," it said.

AZRB closed unchanged at 64.5 sen, giving a market capitalisation of RM310.93 million. — theedgemarkets.com

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