28 August 2008

1HFY2008 Results.

We released our 2nd Quarter FY2008 results on this week.

As quoted from a particular research report, "...1H08 revenue of RM135.3m was 15% and 18% below our’s and market’s forecast while net profit of RM 7.5m constituted only 23% of our estimates and street’s consensus... ...Slashing FY08 and FY09 net profit projections by 48.5% and 48.0% to RM16.8m and RM21.2m respectively to reflect the lower-than-expected construction and property contribution..."

There is a particular point I would like to point out here.

I admit that the figures have been lower than expected/forecasted, but what the reports did not realize is that the lower construction revenue had been a self-imposed decision, or rather, it was a strategy planned well ahead. If we had been more aggresive to obtain more contracts in 2007, I agree that we would have recorded a higher revenue, but with the raw material prices fluctuating, we would have also incurred tremendous losses.

We decided that it was best to stay extra careful in 2007 not to replenish our order book too much because we had foreseen the prices of materials shooting up, which turned out to be true.

Anyways, now that the prices are stabilizing, I reckon there should be more tenders coming in sooner than later. Prices would be based on a stabilized/peak prices, which when it dips, will turn into additional profits for us. There is a very healthy order book which is able to comfortably sustain up to 2010, hence there is much room for improvement.

I think that somehow sums it up a bit.


Post a Comment