KUALA LUMPUR (Nov 25): Kerjaya Prospek Bhd, whose third quarter net profit jumped 51% quarter-on-quarter, expects its financial performance to further improve in the coming quarters in anticipation of a recovery in business following the easing  of lockdown restrictions.

The expected business recovery will also be fuelled by a stronger orderbook and margin expansion next year, the construction group's non-executive chairman, Datuk Tee Eng Ho, told a virtual press briefing on the group's results for the third quarter ended Sept 30, 2021 (3QFY21).

Tee said the group’s profit-after-tax (PAT) margin is expected to return to the double-digit level next year at between 10% and 12% — after the PAT margin eroded to 9.8% as of Sept 30, 2021 versus 11.2% a year earlier — on expectation that raw materials will fall berween 5% and 10%.

“The peak for the raw materials price is over.  As you can see, the iron ore prices have dropped substantially. Going forward, the raw material prices will further come down once the logistic issue (high cost) is resolved. I think in the next three to six months this issue will resolve,” he said.

He added that stability in the political scene and pent-up demand for property will also help to lift its financial performance going forward.

In terms of new job wins, Tee expects the group to achieve its RM1 billion target this year, having clinched RM907.6 million worth of contracts so far, and is also looking for a stronger new orderbook next year.

The group currently has an outstanding orderbook of RM3.6 billion, which will underpin earnings visibility for the next three years.

Kerjaya Prospek saw its net profit surge to RM24.18 million in 3QFY21, from RM16 million in the immediate preceding quarter. Revenue rose 17.25% to RM222.64 million from RM189.89 million in 2QFY21.

The group attributed the better performance to the resumption of construction projects after the Full Movement Control Order in 2QFY21, which saw construction projects being halted for four weeks.

On a year-on-year basis, Kerjaya Prospek’s net profit was down 20.42% from RM30.38 million in 3QFY20, while revenue was flat compared with RM222.21 million previously.

The group blamed the softer year-on-year performance on lower revenue contribution from non-operating income due to a one-off gain from the disposal of foreign quoted shares a year ago.

For the cumulative nine-month period, Kerjaya Prospek saw its net profit rise 6.05% to RM66.57 million, from RM62.77 million in the previous corresponding period, while revenue expanded 21.18% to RM681.21 million from RM562.15 million.

The group said the improved nine-month financial performance was due to less impact on the progress of construction projects from the implementation of various lockdowns.

Kerjaya prospek's share price closed down one sen or 0.82% at RM1.21, bringing it a market capitalisation of RM1.5 billion.