KUALA LUMPUR (Dec 24): KKB Engineering Bhd (KL:KKB) has initiated adjudication proceedings under the Construction Industry Payment and Adjudication Act against a contractor over outstanding claims amounting to RM10.1 million.
The Sarawak-based steel fabrication company, in which Cahya Mata Sarawak Bhd (KL:CMSB) holds a 17.9% stake, said the claims are related to a RM17 million sub-contract awarded by Fook Lai Construction & Development Sdn Bhd in 2012.
The project involves a glove factory at Petchem Industrial Park in Tanjung Kidurong, Bintulu.
KKB said the legal action is not expected to have any material effect on its earnings for the financial year ending Dec 31, 2024 (FY2024), as well as any operational impact on the company.
KKB’s net profit for the third quarter of FY2024 dropped 13.29% to RM8.44 million, from RM9.73 million a year earlier, dragged by lower profit contribution from the civil construction division and weak performance of the manufacturing sector due to slower activities. Revenue was up 2.2% to RM143.14 million from RM140.05 million.
For the first nine months of FY2024, KKB’s cumulative net profit declined 32.26% to RM15.59 million versus RM23.02 million in the same period a year ago, while revenue rose 32.06% to RM402.68 million from RM304.91 million, thanks to higher contribution from steel fabrication division which offset the lower revenue from the manufacturing sector.
KKB Engineering shares were last traded at RM1.54, giving the company a market capitalisation of RM444.64 million.