KUALA LUMPUR (Aug 27): Construction firm Kerjaya Prospek Group Bhd, which posted a 15.83% increase in net profit to RM70.64 million in the first half of this year (1HFY2024), is anticipating stronger construction activities in the second half of the year that will further drive its growth.

It is optimistic of getting over RM1.6 billion of new orders, surpassing its initial target to replenish its order book by RM1.5 billion worth of new jobs for the financial year ending Dec 31, 2024 (FY2024), according to its non-independent non-executive chairman Datuk Seri Tee Eng Ho.

Year-to-date, Kerjaya Prospek has won contracts worth RM1.3 billion, bringing its outstanding order book to RM4.4 billion. In FY2023, the group clinched RM1.3 billion worth of new jobs.

The group attributed the improved outlook for the construction industry to the country's political stability, which may attract more foreign direct investments and translate into more construction job opportunities. Labour shortage is also no longer a concern for the industry with the inflow of foreign labour.

Tee said the group is now bidding for RM4 billion worth of construction jobs, half of them involving data centres in Klang Valley and Johor.

Meanwhile, Tee said the group’s operating costs have increased since the diesel subsidy rationalisation started in June this year, adding 2% to its total costs. He is expecting the subsidy rationalisation's impact to stabilise going forward.

Kerjaya Prospek made a net profit of RM37.08 million for its second quarter ended June 30, 2024 (2QFY2024), up 17.45% from RM31.57 million in 2QFY2023, thanks to an upswing in construction activities. Quarterly revenue rose 27.85% to RM395.41 million from RM309.28 million.

With the release of the quarterly results, it announced a second interim dividend of 2.5 sen per share, payable on Oct 9, bringing the group's year-to-date dividend payout to five sen, its bourse filing showed on Tuesday (Aug 27).

The better quarterly earnings lifted the group’s first half results (1HFY2024), with net profit rising 15.83% to RM70.64 million from RM60.98 million, while revenue expanded 20.7% to RM732.55 million from RM605.53 million.

The construction segment, which is the group's main revenue driver, recorded a 16.3% increase in revenue to RM704.1 million from RM605.5 million a year ago. Its property development segment contributed the remaining RM27.2 million to group revenue.

Kerjaya Prospek’s share price closed unchanged at RM1.89 on Tuesday, bringing the group a market capitalisation of RM2.4 billion. Year-to-date, the stock has risen 22%.