Kerjaya Prospek Group Bhd, a renowned construction firm, anticipates an enhancement in its net profit margins in the forthcoming quarters, buoyed by a reduction in tax rates and the potential reversal of provisions allocated for construction delays. At an earnings briefing, Datuk Tee Eng Ho, the Chairman of Kerjaya Prospek, pointed out that the company’s net profit margin stood at 7.3% in the fourth quarter of the fiscal year 2023 (4QFY2023), a decrease from 10% in the corresponding period the previous year, mainly due to a higher tax rate of 30% against the customary 24%. This increment was attributed to profits derived from the construction of yet-to-be-sold properties.
“In future, my tax may be lower, margin may be higher,” Tee Eng Ho remarked, indicating a positive outlook for the company’s financial performance. He also mentioned that the net profit margin was influenced by provisions for delays in older projects, a consequence of disruptions caused by the COVID-19 pandemic. “Kerjaya Prospek will make provisions while the company ‘sort [it] out with the client’. At the end of the day, if we can resolve, we write back,” he elaborated.
Despite these challenges, Kerjaya Prospek reported a commendable 25% increase in net profit for 4QFY2023, buoyed by enhanced progress in the group’s construction activities. The company’s net profit surged to RM35.74 million, or 2.83 sen per share, from RM28.6 million, or 2.27 sen per share, year-on-year. Concurrently, revenue saw a significant 71% jump to RM489.04 million from RM285.26 million in the same period, propelled by robust construction operations.
“We look forward to replicating our success in 2024 with commendable target contract awards of RM1.5 billion and maintaining a strong profitable track record as a reputable contractor in the industry,” stated Tee Eng Tiong, Chief Executive Officer of Kerjaya Prospek. Additionally, the construction giant announced a fourth interim dividend of two sen per share, reinforcing its commitment to rewarding shareholders.
For the full fiscal year 2023, Kerjaya Prospek achieved a 15% growth in net profit, reaching RM132.29 million from RM114.8 million in the previous year. Revenue also climbed to a record RM1.46 billion, marking a 30% increase from RM1.12 billion, evidencing the company’s resilience and operational efficiency.
Maintaining a robust financial standing, Kerjaya Prospek reported a healthy net cash position of RM167.2 million and a current ratio of 3.4 times as of 4QFY2023. With an ambitious target of RM1.5 billion in contract awards for 2024 and a substantial order book of RM4.2 billion, Kerjaya Prospek is poised for continued growth and success in the construction sector.
