KUCHING: Quality Concrete Holdings Bhd sees the sharp rise in oil prices and material cost due to the sudden eruption of geopolitical war between Russia and Ukraine as posing a new set of challenges to the group’s operations.
Brent crude oil has surged to US$115 per barrel from low of below US$30 per barrel in 2020.
Quality Concrete said the Russia-Ukraine war started while thing seems to be improving after Malaysia entered into endemic phase of COVID-19,with travelling and business operating hours restrictions lifted.
As these restrictions were lifted, it is hope that business will gradually return back to pre-pandemic level with a more relaxed COVID-19 rules and standard operating procedures (SOP).
The company said its management is monitoring closely the high oil prices and material costs to ensure that the group’s overall performance will not be severely affected.
Quality Concrete reported lower group net profit of RM2.06 million in first quarter ended April 30, 2022 (Q12022) on declined revenue of RM52.1 million, down from RM2.74 million and RM59.5 million respectively in Q12021.
Earnings per share decreased to 3.56sen from 4.72sen.
The manufacturing segment saw its revenue shrank to about RM15.6 million in the current quarter under review (Q12021:RM20.9 million) while the property development & construction segment also posted lower revenue of RM36 million (RM38.2 million).
The trading segment, however, recorded higher revenue of RM534,000 (RM392,000).
Quality Concrete said the drop of RM5.3 million in the manufacturing segment’s revenue in Q12022 was mainly due to lower turnover of the pipes and timber products’ divisions which recorded decrease of RM3.1 million and RM1.7 million respectively.
“The main reason for of decrease in revenue from pipes division is lesser water infrastructure projects being awarded by government whereas timber products’ division was due to shortage of raw material supply,” it added in accompanying notes to its financial results.
The manufacturing segment plunged into the red, with operating loss of RM78,000 (Q12021:+RM571,000).
The lower revenue of the property development & construction division was affected by the road maintenance division, which registered lower turnover of RM7.4 million (RM9 million) because of a reduction of road length for maintenance.
The segment recorded declined operating profit of RM3.95 million (RM5 million).
