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George Kent Q2 net profit down 21% on lower engineering division revenue

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PETALING JAYA: George Kent (Malaysia) Bhd net profits fell 20.9% to RM8.74 million for its second quarter ended July 31, 2020 against RM11.05 million reported in the same period of the previous year, on the back of lower revenue from its engineering division despite a higher fair value gains on investment.

Revenue for the period stood at RM70.16 million, a 28.2% decline from RM97.72 million reported previously.

In the cumulative six months, the group’s net profit tumbled 49.2% to RM12.47 million from RM24.56 million in the corresponding quarter of the previous year.

Meanwhile, its revenue for the period stood at RM109.47 million, a 39.4% decline from RM180.5 million reported previously.

For the period, George Kent has declared an interim dividend of 1 sen per share payable on October 22, 2020

In its Bursa disclosure, the group reported that its metering business saw a profit of RM6.91 million for the quarter, 60% high compared to RM4.33 million profit reported in the same period of the previous year.

Its engineering business profits fell 44% to RM9.49 million against RM17.03 million reported previously.

George Kent’s chairman, Tan Sri Tan Kay Hock commented that the group’s improvement over the previous quarter (Q1’20) was commendable due to the partial resumption of business and he is optimistic of its prospects given the group’s ongoing operations and long-term plans to become a one-stop purveyor of water meters.

“We are actively growing our product portfolio through partnerships with other manufacturers. The expanded range will accelerate our penetration into more markets around the world,” he said in a press release.

Tan also pointed out the group’s long-term license agreement with Honeywell enhances its control over component supply and production costs and also gives it the right to sell water meters to 15 new territories in Asia.

Meanwhile its home-grown smart metering technology is undergoing real-world tests through pilot projects with state water authorities and George Kent is pursuing other such opportunities locally and in the region.

As for the railway space, the chairman highlighted that it has established a network with international rail specialists that will assist it in tapping into regional projects requiring international collaborations through joint ventures or strategic alliances.