KUCHING: Cahya Mata Sarawak Bhd’s (CMS) ability to grow revenue in most divisions denotes positive tone on production demand and construction progress, analysts say.
According to CMS, for the first nine months of 2018 (9M18), the group reported a total revenue of RM1.22 billion, an increase of 21 per cent in comparison to the preceding year’s corresponding period’s revenue of RM1.01 billion.
Additionally, CMS’ profit after tax and non-controlling interests (PATNCI) of RM208.62 million for the period was 42 per cent higher than the PATNCI of RM146.5 million in the corresponding 9M period of last year.
“We are encouraged to see that the group is able to grow revenue in most divisions, denoting positive tone on production demand and construction progress,” the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) said.
“Whilst the margin compression observed pose risk to earnings, we are not ruling out the possibility of margin improving should the business environment turns favourable.”
Moving forward, MIDF Research sees the future development of Sarawak will provide strong narrative to the long-term sustainability of CMS, which has significant presence in the state.
“Accordingly, we believe the state’s development plan funded by RM9.1 billion budget allocations will be able to fuel further optimism on the state’s construction outlook.
“Some of the major infrastructure projects being planned in Sarawak include the Coastal Road, Second Link Road and State’s Water Grid.”
Source: Borneo Post Online