KUCHING: Cahya Mata Sarawak Bhd (CMS) reported total revenue of RM1.61 billion and a pre-tax profit (PBT) of RM332.79 million for its financial year 2017 (FY17).
Both its revenue and profit before tax increased by four per cent and 10 per cent, respectively, in comparison to the preceding year’s result of RM1.55 billion and RM302.14 million.
Year-on-year, the group’s profit after tax and non-controlling interests (PATNCI) of RM 215.24 million for FY2017 was 27 per cent higher than the RM169.18 million reported for FY2016. Earnings per share (EPS) stood at 20.03 sen versus 15.75 sen for the previous year.
Commenting on the results, CMS Group chief executive officer – Corporate, Datuk Isaac Lugun, said there was an up-swing in the group’s financial performance for FY17 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,” he said in a statement yesterday.
“We expect the demand for construction materials and related services to remain sluggish in 2018, but we will start to see some upsides as the Pan Borneo Highway project gathers momentum, raising demand for quarry products and cement-based materials.”
“We are hopeful that spending on recent allocations made by the Federal and State governments for infrastructure and telco-infrastructure will start soon to help boost construction activity in the State. We also expect our strategic investments, through our associates, to continue to positively contribute to the Group’s performance.”
Contributions towards FY2017’s earnings came from all four Divisions. The cement division maintained a healthy PBT level of RM101.34 million, marginally short of FY16’s PBT of RM105 million.
The division’s resilient performance came on the back of the newly commissioned Integrated Cement plant in Mambong, enhanced operational and production efficiencies of the Pending and Bintulu plants, as well as savings from lower coal and key raw material costs.
The construction and road maintenance division recorded a PBT of RM90.20 million in FY2017 – an increase of six per cent over FY16’s profit of RM85.41 million on the back of higher revenue.
“Road maintenance revenue was 2 per cent higher in FY17 due to an increase in the length of state roads maintained,” it said in the statement. “However, this was partially negated by a reduction in the length of Federal roads maintained due to the construction of the Pan Borneo Highway project.
“Construction revenue was 65 per cent higher in FY2017 mainly due to contributions from two new road construction projects; namely, the Pan Borneo Highway project and the Miri-Marudi road rehabilitation project.”
Meanwhile, CMS’ construction materials and trading division reported a PBT of RM59.71 million for FY2017, 44 per cent lower than the PBT of RM106.75 million reported during FY16.
This was mainly attributable to lower sales due to the closure of the Penkuari quarry plant as a result of soil erosion, shut-down and relocation of a premix plant and slower implementation of Government projects during the first half of the year.
The property development division’s PBT soared by 101 per cent to a PBT of RM47.22 million in FY17, from FY2016’s reported PBT of RM23.51 million. This was mainly due to the increase in revenue recognition of the Rivervale Residences housing project and the Raintree Square commercial project, and, additionally, the rental income from a hypermarket in Bandar Samariang.
The Group also recorded a higher share of profit of RM31.62 million in FY2017 from the share of results of its joint-ventures in comparison to FY2016’s profit contribution of RM23.28 million. The increase was mainly attributable to the excellent performance of CMS Opus Private Equity Sdn Bhd and two private equity funds.
Furthermore, CMSB recorded a profit of RM43.50 million in FY2017 from the share of results of its associates, a significant improvement of 224 per cent in comparison to FY2016’s losses of RM35.17 million.
This was largely due to the Group’s 25 per cent associate, OM Materials (Sarawak) Sdn Bhd’s improved performance, which is expected to be sustained if ferrosilicon and manganese alloy prices and production outputs are maintained at their current levels. The OM Materials (Sarawak)’s loss in FY2016 was mainly due to the unwound of its currency hedging position.