PETALING JAYA: Despite the downside risks, KKB Engineering Bhd
is poised to ride on the wave of recovery with its full-fledged integrated capabilities, according to its executive chairman Datuk Seri Kho Kak Beng.
In the company’s latest annual report, he said that in the financial year 2023 (FY23), the engineering sector expects to turn a new page with the completion of projects secured pre-Covid-19 and the replenishment of its order book.
“With a stable foundation, we possess the financial strength and resilience to embrace multiple opportunities in the future, while reducing reliance on our traditional engineering and construction activities.
“While we expect the operating environment to remain volatile in the year ahead, we remain resilient and resolute to stay on course.
“We continue to seek opportunities to drive our business forward with our diversified range of businesses by leveraging on our strong track record and capabilities that we have built over the years to return to a higher level of growth and sustainability,” he noted.
However, he added the downside risk remains due to the ongoing supply chain disruptions, inflationary pressures, threat of new Covid-19 variants and climate change.
Kho said the group would continue to upgrade its yard facilities and consolidate its resources by focusing on its core businesses, control its operating costs and manage the business risks to stay competitive.
He said KKB’s strong prospects were underpinned by a robust outstanding order book of approximately RM314mil as at Dec 31, 2022.
The group had secured a contract for the provision of engineering, procurement and construction of Standard Wellhead Platforms for MLNG FaS (F27, F22 and Selasih) Gas Field Development project from Sarawak Shell Bhd in the beginning of 2023.
He said this was a significant step towards raising its order book for major steel fabrication jobs for the oil and gas facilities.
Beyond 2022, he said KKB remained focused on strengthening and boosting the value of its existing operations.
“The group will continue to explore and evaluate strategic business opportunities, including but not limited to strategic investment, partnerships or acquisitions,” he added.
The board of directors has proposed a first and final single-tier dividend of six sen per share for FY22 compared with five sen in FY21.
This is subject to approval by shareholders at the forthcoming AGM.
The proposed dividend, if approved, would amount to approximately RM17.3mil.
Based on the latest job wins worth some RM463.3mil this year, RHB Research estimated the group’s latest outstanding order book to be around RM700mil (order book-to-revenue cover ratio of 1.8 times).
As such, it is maintaining a “buy” call on the stock with a target price of RM1.72 and 23% upside with around 4% FY23 yield.
