Its earning surged to RM11.27mil in the third quarter ended Sept 30, 2017 from only RM226,000 a year ago.
The construction company said on Wednesday its revenue increased by 19.2% to RM60.55mil from RM50.78mil. Earnings per share were 2.15 sen comapred with 0.04 sen.
It said the group’s revenue was contributed by the increase in its overall construction activities, particularly from two major key projects.
The significant increase in earnings was due to one major key project which has an above average industry margin entering into the acceleration phase; thus, giving a stronger earnings accretion to the group.
“Besides that, the disposal gains due to replacement cycle of fixed assets and interest income also contributed to the total PBT and PAT,” it said.
Ikhmas Jaya said after stripping off these income, the group’s core PBT was RM5.3mil and PAT RM5mil.
Its balance sheet remains resilient with a current working capital ratio of 1.4 times and a net gearing ratio of 0.25 times.
Its managing director Datuk Ang Cheng Siong said the Q3 was its strongest quarterly results thus far despite the setbacks for the first half of 2017 which was due to most of projects not being in the acceleration phase and rise in costs of raw materials, labour, transport and fuel prices.
For the nine months ended Sept 30, 2017, it said its earnings increased by 25.4% to RM12.22mil from RM9.75mil in the previous corresponding period. Its revenue rose by 12.6% to RM185.05mil from RM164.37mil.
“The increase in revenue was mainly due to the group’s increased construction activities, particularly in two major key projects during the current quarter ended Sept 30, 2017,” it said. This enabled Ikhmas Jaya to record the higher revenue in Q3.
The higher earnings were also due to disposal gain due to replacement cycle of fixed assets and interest income which contributed about 40.0% to the profit before tax (PBT) and profit after tax (PAT).
“Without the aforesaid, the group’s PBT and PAT would be RM8.3mil and RM5.7mil respectively,” it said.
Ikhmas Jaya said the decline in PBT and PAT was mainly due to erosion in average project margin caused by rising costs of raw materials, labour, transport, fuel and regulatory compliance.
It also cited unavoidable delays in finalisation of completed project accounts and also additional costs incurred in one infrastructure project in the second quarter.