Lower construction materials contribution pulls Cahya Mata Sarawak Q4 earnings down 35.17%

PETALING JAYA: Cahya Mata Sarawak Bhd (CMSB) saw its net profit for the fourth quarter ended December 31, 2017 slump 35.17% to RM65.80 million from RM101.51 million a year ago, due to higher production cost of cement, provision for soil erosion remedial works, foreign exchange loses and lower share of results of joint ventures.
Revenue grew 30.8% to RM588.19 million in the quarter under review from RM449.54 million in the previous year's corresponding period.
The group has proposed a final dividend of 8 sen for the quarter under review.
However, CMSB's full-year net profit stood at RM215.24 million, 27.2% higher than the RM169.18 million reported in the previous financial year due to the increase in the share of profits in associates and joint ventures coupled with the higher earnings by the construction and road maintenance and the property development divisions.
Revenue for the year inched slightly higher by 3.6% to RM1.61 billion from RM1.55 billion in the financial year ended December 31, 2016.
"There has been an up-swing in the group's financial performance for FY2017 despite the challenging market and operational conditions faced by our group. During the year, demand for construction materials and related services was sluggish but this was offset by the robust performance of our property development division, the strong contribution from our joint ventures and the turnaround of our associate, OM Materials (Sarawak) Sdn Bhd, which was buoyed by the improvement in commodity prices," said CMSB CEO – Corporate, Datuk Isaac Lugun in a statement.
While he expects 2018 to remain sluggish, he noted that upside can be recognised as the Pan Borneo Highway project gathers momentum, raising demand for quarry products and cement-based materials.
Isaac is also hopeful that spending allocations by the state and federal governments for infrastructure and telco-infrastructure will help boost construction activity in the state.
At 2.50pm, CMSB shares gained 5 sen or 1.1% to RM4.40 on some 335,100 shares done.