KUALA LUMPUR (Nov 16): KKB Engineering Bhd's net profit for the third quarter ended Sept 30, 2020 (3QFY20) fell 42.92% to RM11.04 million, from RM19.34 million a year ago, dragged by the slower pace of site work activities amid the Covid-19 pandemic.

The group said in a bourse filing that its revenue for 3QFY20 also decreased by 28.84% to RM117.75 million, from RM165.48 million a year ago.

However, its net profit was up by 152.88% from RM4.36 million in 2QFY20, while revenue was 32% higher than RM89.2 million in the immediate preceding quarter.

For the cumulative nine months ended Sept 30, 2020, the group's net profit fell 20.77% to RM22.22 million, from RM28.05 million a year earlier. Its revenue for the period also decreased by 21.8% to RM315.14 million, from RM403 million.

The group said its consolidated revenue for the quarter and year-to-date is lower than the preceding year's comparative period mainly due to lower revenue recognition from the group's civil construction and steel fabrication divisions.

"The group's results were seen to be affected by the slower pace of site work activities of the ongoing projects induced by the stringent Covid-19 standard operating procedures imposed by the authorities in compliance with the Movement Control Order, Conditional Movement Control Order and Recovery Movement Control Order (RMCO) to curb the spread of Covid-19," it said.

The group expects to achieve commendable results for the financial year ending Dec 31, 2020, barring any unforeseen circumstances.

"As we are now in the RMCO phase, our project sites have since resumed work although it will take some lead time for our operations to regain the momentum to return to full normalcy," it said.

The group will also continue to strengthen its business operations to remain competitive in its core business segments and focus on optimising its costs whilst improving project delivery and execution in order to improve margins for both its engineering and manufacturing sectors under this challenging and volatile business environment.

It said the group's resilience is underpinned by its current orders in hand and the ongoing construction works for the Pan Borneo Highway project in Sarawak (Phase 1 Works Package Contract); water-related construction projects including the supply, laying and commissioning of water pipes, other related infrastructure works implemented under the Sarawak Water Supply Grid Programme and the ongoing major onshore fabrication jobs for the oil and gas facilities, which will see it through the next two years.

KKB Engineering closed up one sen or 0.65% to RM1.55, giving it a market capitalisation of RM399.598 million.