KUALA LUMPUR (Nov 21): Energy services firm Kinergy Advancement Bhd (KL:KAB) on Thursday reported a 70% year-on-year (y-o-y) drop in its third-quarter net profit, mainly because operating profit from its sustainable energy solutions (SES) segment fell on the absence of negative goodwill from the acquisition of subsidiaries — or bargain purchase gain — which was reflected in last year's results.

Net profit for the three months ended Sept 30, 2024 (3QFY2024) was RM6.11 million, down from RM20.36 million in the same quarter last year, the Main Market-listed company said in a filing.

This is despite revenue jumping 67.65% to a record high of RM81.52 million from RM48.62 million a year ago, on higher contributions from both its engineering and SES segments.

Kinergy, formerly known as Kejuruteraan Asastera Bhd, said SES’ operating profit declined 60.13% to RM8.50 million from RM21.32 million in 3QFY2023, despite revenue jumping over three times to RM40.17 million from RM12.88 million on new projects and entities acquired, as the group had logged the negative goodwill from the acquisition of subsidiaries in 3QFY2023.

The engineering segment, meanwhile, saw operating profit rising to RM3.19 million from RM245,000, as revenue rose 15.7% to RM41.24 million from RM35.65 million, driven by project progress.

No dividend was declared for the reporting quarter.

For the first nine months of FY2024, Kinergy’s net profit fell 36.32% to RM16.64 million from RM26.14 million in the same nine months of FY2023, though revenue rose 21.19% to RM165.38 million from RM136.46 million.

As of September, Kinergy’s order book stood at RM850 million, with RM120 million in engineering projects and RM730 million in SES projects, it said in a statement accompanying the release of its results.

It said its tender pipeline has expanded to RM3.3 billion, indicating significant potential and opportunities in sustainable energy and engineering projects.

Moving forward, the company said it would continue to focus on expanding its energy solutions and customer base in the energy sector, replenishing its order book, and venturing into neighbouring Asian countries. “The group will focus on identifying customers who are keen on optimising operational cost by improving energy efficiencies through the solutions provided,” it said.

Kinergy shares closed half a sen or 1.56% higher at 32.5 sen on Thursday, valuing the company at RM635.81 million.