KKB Engineering’s Q2 2025 Report: A Tale of Two Sectors and a Strong Rebound
KKB Engineering Berhad has just released its financial results for the second quarter ended June 30, 2025. While a year-on-year comparison shows a decline due to the completion of major projects, a closer look reveals a powerful quarter-on-quarter rebound and a remarkable surge in profitability for shareholders. Let’s dive deep into the numbers to understand the full story behind KKB’s performance.
Core Financial Highlights: A Mixed but Promising Picture
At a glance, the top-line figures might seem concerning compared to the same period last year. However, the operational turnaround from the previous quarter paints a much more optimistic picture, showcasing the company’s resilience.
Key Metrics for Q2 2025
- Revenue: RM55.6 million
- Profit Before Tax (PBT): RM10.4 million
- Profit Attributable to Equity Holders: RM7.1 million (a 108.9% increase YoY)
- Basic Earnings Per Share (EPS): 2.46 sen (more than doubled from 1.18 sen YoY)
Year-on-Year Performance (Q2 2025 vs Q2 2024)
The year-on-year figures reflect a transitional period for KKB, as major engineering projects reached their final stages. This led to a predictable, albeit significant, drop in revenue.
Q2 2025 (Current Quarter)
Revenue: RM55.6 million
Profit Before Tax: RM10.4 million
Net Profit: RM8.1 million
Q2 2024 (Comparative Quarter)
Revenue: RM109.2 million
Profit Before Tax: RM17.5 million
Net Profit: RM11.5 million
The Group’s revenue saw a 49.1% decline compared to the same quarter last year. This was primarily driven by lower progress billings from the Steel Fabrication division as two major projects for Sarawak Shell Berhad and Samsung E & A Engineering Sdn Bhd are nearing completion.
Quarter-on-Quarter Rebound (Q2 2025 vs Q1 2025)
This is where the story gets exciting. KKB demonstrated a formidable rebound from the immediate preceding quarter (Q1 2025), swinging from a loss to a solid profit. This turnaround was fueled by the stellar performance of its Manufacturing sector.
| Metric | Q2 2025 | Q1 2025 | Change |
|---|---|---|---|
| Revenue | RM55.6 million | RM45.1 million | +23.1% |
| Profit/(Loss) Before Tax | RM10.4 million | (RM4.2 million) | +346.3% |
| Profit/(Loss) Attributable to Equity Holders | RM7.1 million | (RM1.4 million) | +621.6% |
Deep Dive into Business Segments
The contrasting performance between the Engineering and Manufacturing sectors tells a clear story of diversification and resilience.
Engineering Sector: A Temporary Slowdown
The Engineering sector, which contributed 58% of total revenue, saw its income decrease to RM32.4 million from RM104.6 million in Q2 2024. This was expected as major Steel Fabrication and Civil Construction projects move towards completion. Revenue in the current quarter was mainly derived from ongoing work for the Sarawak Shell wellhead platforms and the Serian Regional Water Supply project.
Manufacturing Sector: The Star Performer
The Manufacturing sector was the highlight of the quarter, with revenue rocketing to RM23.1 million from just RM4.6 million in the same quarter last year. This growth was driven by two key areas:
- Steel Pipes: Revenue surged to RM21.3 million, supported by increased demand from its plant in Kota Kinabalu, Sabah, and supplies for water treatment projects in Sibu and Serian, Sarawak.
- LPG Cylinders: This division also saw higher revenue of RM1.8 million from the supply and reconditioning of LPG cylinders for Petrosniaga Sdn Bhd.
Financial Health and Shareholder Returns
KKB maintains a healthy financial position. As of June 30, 2025, the Group’s total equity stood at RM450.6 million. A key strength is its minimal debt, with total borrowings consisting only of RM244,571 in lease liabilities. This strong balance sheet provides the stability needed to navigate market cycles.
In a sign of its commitment to shareholders, the company paid a final dividend of 7.5 sen per share for the financial year 2024 on June 24, 2025.
Risks and Future Outlook
The management has provided a candid and cautious outlook for the remainder of 2025. While the Group has built positive momentum from Q1, it acknowledges the challenges ahead, particularly for the Engineering sector.
The company expects a “reset” of its activities in 2025 following the delivery of major projects. This is anticipated to result in lower overall revenue and profit for the financial year. The primary challenge lies in the slower rollout of new contracts from major oil companies. However, the Board and Management remain positive, believing the Group will perform favourably by leveraging its diverse business portfolio and strong financial position. Their strategy focuses on increasing the order book, collaborating with strategic partners, and seeking new business opportunities to ensure long-term sustainability.
Summary and My Take
KKB Engineering’s Q2 2025 results present a nuanced but ultimately encouraging picture. The year-on-year decline was an anticipated consequence of project cycles, but the powerful quarter-on-quarter turnaround, driven by a resurgent Manufacturing division, highlights the Group’s operational agility. The impressive jump in profit attributable to shareholders and EPS, coupled with a nearly debt-free balance sheet, are significant positives for investors.
However, the path forward requires careful navigation. The key risks are clearly outlined:
- Dependency on Engineering Contracts: The Group’s performance is sensitive to the timing of major contract rollouts in the Oil & Gas and construction sectors, which can be cyclical.
- Expected “Reset” in 2025: Management has guided for lower overall revenue and profit for the full year as it works to replenish its order book.
- Competitive Environment: The engineering and manufacturing landscape remains highly competitive, requiring continuous effort to secure profitable projects.
Despite these challenges, KKB’s strong financial footing and diversified operations provide a solid foundation. The key for investors to watch will be the company’s success in securing new, high-value projects for its Engineering division to fuel the next wave of growth.
Join the Conversation
This quarter showcases a company in transition, managing the end of a major project cycle while capitalizing on strengths in other areas. The rebound is impressive, but the focus now shifts to refilling the order book.
What are your thoughts on KKB’s performance? Do you think the Manufacturing sector’s strength is sustainable enough to buffer the slowdown in Engineering until new major contracts are secured? Share your views in the comments below!