KUCHING: Analysts believed Naim Holdings Bhd (Naim) could sustain its near term earnings despite the less favourable market condition.
The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) in a report yesterday said it remains hopeful of Naim’s earnings outlook supported by its healthy outstanding construction order book and infrastructure construction projects available in Sarawak.
It maintained the earnings forecast for Naim and believed that the capabillity of the company to replenish its order book and opportunities from Sarawak Corridor of Renewable Energy (SCORE) as well as demand for infrastructure construction in Sarawak could sustain the company’s earnings.
Additionally, the research division of TA Securities Holdings Bhd (TA Research) in a report said Naim’s jobs in hand could support earnings for the company’s construction division until 2016.
Meanwhile, Naim told Bursa Malaysia on August 27 that pre-tax profit in the second quarter of 2015 (2Q15) ended June 2015 dropped 74 per cent year-on-year (y-o-y) to RM9.84 million from RM37.22 million recorded in 2Q14.
The company said revenue in 2Q15 decreased by 12 per cent y-o-y to RM138.59 million from RM158.11 million generated in 2Q14.
MIDF Research opined that the lower earnings in 2Q15 were due to lower progress billings from infrastructure, civil construction jobs and completed jobs in 2014 and 1Q15.
The research firm noted that Naim is currently participating in the construction of Klang Valley Mass Rapid Transit (KVMRT) station.
It observed that the lower earnings were also attributed to lower sales from the property development division for projects such as Kuching and Bintulu Paragon condominiums.
MIDF Research said the lower sales for those projects indicated a waning appetite in property demand following cooling measures unveiled by the government to avoid sharp run-up in property prices. Nonetheless, the research firm is hopeful that Naim is able sustain its near term earnings.