Kelington Group Bhd is seeing a revival in its share price after falling from its 52-week high of RM3.71 in July. The recent heightened interest in the construction and engineering firm was after the company told analysts it has strong job prospects.

Kelington’s tender book jumped by RM1 billion after bidding for an ultra high purity (UHP) gas job for Taiwan Semiconductor Manufacturing Company Ltd’s plant in Germany.

Kelington's order book reached RM1.45 billion at end-September, from RM1.29 billion in June, while its tender book surged to an-all time high of RM2.62 billion. It is tendering for several mechanical, electrical, and plumbing (MEP) packages for a data centre in Malaysia.

Kelington is also looking for opportunities to venture into the carbon capture industry via joint venture. Analysts are also optimistic on Kelington’s margin improvement bolstered by a significant increase in higher-margin UHP projects.

The company’s gross profit margin hit a quarterly high of 22.8% in 3QFY2024, which was attributed to a favourable revenue mix and the company’s rapidly growing industrial gas business.

Kelington reported a 3.94% increase in net profit to RM32.92 million in its third quarter ended Sept 30, 2024 (3QFY2024) from RM31.67 million a year earlier. The better performance was mainly due to a higher gross profit margin driven by a strategic focus on revenue composition and a favourable project mix.

The higher earnings for the quarter ended Sept 30, 2024 (3QFY2024) was also supported by higher contributions from the industrial gases division. There was an unrealised forex loss of approximately RM6 million, mainly due to the revaluation of foreign currency balances and receivables as the ringgit strengthened.

The higher profit was achieved despite a 23.52% year-on-year fall in quarterly revenue to RM307.31 million from RM401.82 million as several major projects in Singapore and Malaysia had transitioned out of their accelerated phases and are nearing completion. Malaysia contributed 40% of its revenue followed by Singapore (29%), China (26%) and Taiwan (3%).

On a segmental basis, Kelington said the UHP division remained its primary revenue contributor during the quarter, accounting for 70% of total revenue.

For the first nine months just ended, Kelington’s net profit rose 26.13% to RM84.41 million from RM66.92 million a year ago, despite a 14.8% decline in revenue to RM967.8 million from RM1.14 billion. Looking ahead, Kelington said it is well-positioned to benefit from the expansion of the global semiconductor industry.