KUALA LUMPUR (Oct 30): Utilities engineering firm UUE Holdings Bhd (KL:UUE) saw its net profit fall 4.3% year-on-year to RM6.45 million for the second quarter ended Aug 31, 2025 (2QFY2026) due to an increase in administrative expenses and thinner gross margins, despite posting record quarterly revenue.
Quarterly revenue grew 34% to an all-time high of RM57.67 million from RM43.05 million in the previous year's corresponding quarter, driven by a 47.7% increase in revenue from its core underground utilities engineering segment to RM52.29 million, according to the group's bourse filing on Thursday.
The newly introduced solar engineering, procurement, construction and commissioning (EPCC) business contributed RM689,000 in revenue, while revenue from the manufacturing and trading of high-density polyethylene (HDPE) pipes fell 38.4% to RM4.70 million amid lower demand from Singapore.
UUE attributed the profit contraction to higher administrative expenses and lower gross profit margins, particularly in its Singapore operations.
The group’s gross margin narrowed to 23.3% in 2QFY2026 from 29.5% a year earlier, while operating margin eased to 13.8% from 17%. Operating expenses went up 19.6% to RM4.80 million, while finance costs increased 19.9% to RM543,000.
Earnings per share (EPS) fell to 1.1 sen from 1.7 sen a year earlier. No dividend was declared for the quarter.
For the cumulative six months ended Aug 31, 2025 (1HFY2026), UUE’s net profit shrunk 33.8% to RM8.14 million from RM12.30 million in the previous year’s corresponding period, despite a 9.8% increase in revenue to RM90.08 million.
Managing director Datuk Dr Ting Kok Hwa said the results reflect UUE’s resilience and execution strength, anchored by its core underground utilities engineering business.
He also highlighted the recent strategic expansion into renewable energy via its new solar EPCC unit, Enerxite Sdn Bhd, which supports the group’s earnings diversification plans.
"This move diversifies our earnings base and strengthens our position in the growing sustainable infrastructure market," he said.
Shares of UUE gained one sen to close at 60 sen on Thursday, valuing the company at RM547.46 million.