KUALA LUMPUR: George Kent (Malaysia) Bhd posted a net loss of RM2.66 million for its third quarter (Q3) ended December 31, 2022 (FY23), versus a net profit of RM4.64 million in the same period the previous year due to challenging business environment amid inflationary pressures.

Net loss for the quarter was also recorded due to supply chain delays, labour shortages and elevated oil prices coupled with a volatile ringgit.

Revenue dropped 40 per cent year-on-year (YoY) to RM56.73 million from RM94.66 million in Q3 FY22.

For Q3 FY23, the metering division recorded revenue of RM30.04 million and a segment profit of RM5.93 million, while the engineering division reported revenue and segment profit of RM26.69 million and RM1.93 million, respectively, for the period.

For the nine months, the company's net profit slipped 22.7 per cent to RM12.81 million versus RM16.57 million.

Revenue dropped 13.1 per cent YoY to RM204.82 million from RM235.63 million in the same period the previous year.

For the cumulative period, the metering division posted a segment profit of RM26.32 million on the back of revenue, amounting to RM103.92 million.

Demand for George Kent's water meters remained healthy, underpinned by sustained demand with several successful tenders secured both locally and internationally.

Despite rising costs, the division could stay profitable, having an efficient cost management strategy and implementing automated processes.

"The division has increased its order book, and going forward, the group is optimistic on maintaining the current momentum as it actively pursues plans to expand its water metering market in the region with new product offerings," it said in a statement.

The engineering division generated revenue of RM100.91 million and a segment profit of RM7.52 million.

The division was pursuing other business opportunities, including acquiring companies in the business of rail and water infrastructure projects.

Chairman Tan Sri Tan Kay Hock said George Kent's water metering division continued to be its mainstay, supporting the company with robust results.

"Notwithstanding the loss incurred for Q3 FY23, we are confident of the company's continued resilience and ability to navigate the challenges posed by the ongoing economic uncertainties, as well as our commitment to enhancing shareholder value.

"During the quarter, George Kent continued to invest in new initiatives and capabilities, focusing on strengthening our position as a leading producer of water metering products and solutions and a specialist in rail transportation systems and track works.

"Our long-term growth prospects remain strong, and we look forward to continuing to build on our success in the months and years ahead," he said.