Stay abreast with the latest happenings in Cahya Mata Sarawak Berhad (CMS).

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CMS to Dispose 2% Equity in its Quarry and Construction Business to SEDC

Enhancing Public and Private Sector Collaboration

Kuching (Sarawak), Friday, 28 August 2020 –  Cahya Mata Sarawak Berhad (“CMS” or “the Group”) today announced that it had entered into Shares Sale Agreements with its long-time joint venture partner, Sarawak Economic Development Corporation (“SEDC”), for the proposed disposal of 2% equity interest in Group subsidiaries, CMS Resources Sdn Bhd (“CMSR”) and PPES Works (Sarawak) Sdn Bhd (“PPESW”) for a total cash consideration of RM17.5 million (“the transaction”). The transaction will effectively lower CMS’ stake in each of these two subsidiaries to 49%, while SEDC will have a 51% controlling stake in both these companies.

CMS and SEDC have a long-standing collaboration over the last 27 years. This successful long-standing private-public partnership has brought about much economic progress for Sarawak particularly in terms of the state’s infrastructural development. The transaction is a step in the right direction given the new role that the State Government has entrusted on SEDC to play a more direct and catalytic role in the economic development of Sarawak including the change in quarry licencing policy requiring SEDC to have a stake in all quarries in the State. Importantly, SEDC has assumed the mantle of the State Government’s partner in the economic development of Sarawak.

Pursuant to the transaction, all of CMSR’s quarry-related operations and PPESW’s construction operations, including its road construction activities, will come under the direct control of SEDC. CMS, however, will continue to manage CMSR’s and PPESW’s day-to-day operations until such a time when SEDC may introduce changes to align the management of the two companies with the management of the SEDC group.

Commenting on the exercise, was CMS Group Managing Director, Dato Isaac Lugun, who had this to say: “It is a known fact that the quarry and construction industries are primarily driven by the government especially licencing and roll-out of mega projects.  At the same time, the government relies on those companies with the necessary expertise to drive growth and development in these areas.

It is therefore imperative that both CMS and SEDC, for our mutual benefit, continue to strengthen our collaboration and find new ways to create additional value for both parties and the people of Sarawak. This exercise is a positive step towards cementing the Group’s ongoing strategic collaboration with the State. Furthermore, it also places CMS on a stronger footing to capture business opportunities particularly at the time when several mega infrastructure projects are underway or in the pipeline.”

“The transaction cements the marriage of strength and a realignment of our business strategy moving forward. SEDC has the necessary platform while CMS possesses industry knowledge and a healthy balance sheet. These elements constitute a strong rationale for the disposal and we look forward to continuing our long and fruitful relationship with SEDC.” concluded Dato Isaac Lugun.

The parties target to complete the transaction by end of the year.

CMS Posts 1H2020 PBT of RM49.8 million

Traditional Core Businesses Impacted by MCO

Kuching (Sarawak), Wednesday, 26 August 2020 – Cahya Mata Sarawak Berhad (“CMS” or “the Group”) announced today that it closed six months ended 30 June 2020 (“1H2020”) with profit before tax (“PBT”) of RM49.8 million as compared to RM128.1 million in the same period of the preceding year (“1H2019”). Most of its traditional core businesses were operating at less than optimum levels due to the Movement Control Order (“MCO”) lockdown experienced nationwide in 2Q2020.

For 2Q2020, the Group posted total revenue of RM206.8 million and a PBT of RM23.0 million – a 48% and 65% dip in revenue and PBT respectively in comparison to 2Q2019’s revenue of RM399.2 million and PBT of RM65.6 million. The softer performance in 2Q2020 stemmed from lower revenue and PBT contributions by all its traditional core businesses. This was partially cushioned by higher contribution from associates which increased by 66% to RM20.5 million compared to RM12.4 million in 2Q2019.

Commenting on the Group’s 2Q2020 performance, CMS Group Managing Director, Dato Isaac Lugun said: “Similar to many other businesses, CMS’ second quarter results was mainly impacted by MCO lockdown which resulted in shorter operating days for all our traditional core businesses. Lower revenue coupled with fixed costs, in particular overhead cost, resulted in softer 2Q2020 results”.

The CMS Group achieved the following results over the six months ended 30 June 2020:

The Cement Division’s 1H2020 revenue declined by 31% to RM195.3 million as compared to RM284.2 million in 1H2019. Consequently, the Division’s PBT dropped by 40% to RM18.9 million compared to RM31.7 million in the same period of the previous year. The softer performance was mainly due to lower contribution from both cement and concrete business due to fewer operational days in 2Q2020. Despite lower PBT, the Division’s effort to improve operational efficiency has resulted in lower repair and maintenance cost as well as lower costs associated with imported clinker cost and discharging cost. Since recommencing operations, the Division has been actively implementing catch-up strategies to improve its underlying performance for the coming quarters.

The Construction Materials & Trading Division’s 1H2020 revenue declined by 47% to RM133.8 million while its PBT contracted by 76% to RM9.7 million compared to 1H2019. This Division recorded lower revenue from its quarry, premix, and trading sectors due to the lockdown. The year-on-year (YoY) drop in PBT was partially attributable to an impairment of trade receivables of RM1.5 million in 1H2020 and recognition of one-off provision reversal amounting to RM9.0 million in 1H2019. Moving forward, the Group remains optimistic on the future growth of this Division given that it is potentially one of the key beneficiaries from various mega infrastructure projects planned in Sarawak.

The Construction & Road Maintenance Division’s 1H2020 revenue decreased by 37% to RM151.8 million as compared to RM240.6 million in 1H2019. This was due to lower contribution from both the construction and road maintenance activities. Road maintenance revenue and gross profit margin for 1Q2020 decreased as the road length maintained effective 1 January 2020 was almost half of that maintained previously. Meanwhile, the lower revenue from construction business was mainly due to minimal construction works in 2Q2020 arising from lockdown. The Division’s PBT declined by 67% to RM11.3 million in 1H2020 from RM34.0 million in 1H2019. The Division’s mid-term prospects, however, are well supported by its order book of RM1.23 billion.

The Property Development Division’s 1H2020 revenue declined by 63% to RM28.9 million in comparison to RM77.8 million in 1H2019. This was mainly due to drop in the number of properties sales and lower land value sold in 1H2020. Consequently, its PBT dropped by 73% YoY to RM5.6 million in 1H2020.

Lower contribution from traditional core businesses was partially cushioned by higher contribution from its Strategic Investments. Share of profits from its associates increase to RM31.9 million in 1H2020, 24% higher compared to the RM25.7 million in 1H2019. The higher share of profit was mainly due to higher contribution from Kenanga Investment Bank, KKB Engineering and SACOFA.

Commenting on CMS’ outlook and prospect moving forward, Dato Isaac said: “Despite temporary setback due to COVID-19 situation and the MCO, we are cautiously optimistic of better performance in the coming quarters, especially with all our traditional core businesses back in full swing to catch up with pending orders and works that were halted in 2Q2020. Meanwhile, we have also taken prudent steps to enhance our cost control initiatives including managing and rationalizing capital expenditures. Furthermore, we believe that the incoming mega infrastructure projects in Sarawak will bode well for our traditional core businesses especially the Cement, Construction Materials & Trading and Construction & Road Maintenance Divisions. We will continue to leverage on our local knowledge and experienced management team to maximise our participation in the Sarawak growth story.” concluded Dato Isaac Lugun.

The Boy from Long Lellang

DayakDaily Advertorial
Monday, 17 August 2020

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Long Lellang, a remote village on the Kelabit Highlands.

This is the story of a boy from Long Lellang, a village so remote that this may be the first and the last time you will get to hear about it.

Situated in the Kelabit Highlands of Bario, the village has a peculiarity in that, it is surrounded by Penan instead of Kelabit villages.

Decades ago, a boy was born to a humble farmer in this village, unknown to many even today. As a staunch church leader who prayed every morning at village chapel, one expects something amazing to happen in this poor but honest hard-working family.

Over the years, the farmer actually found the boy to be quite different. There was a quiet disposition about him — friendly and sociable, yet reserved and laconic. Most times, the boy would be immersed in his thoughts, occasionally coming across as pensive and broody, unlike the other boys in the village. If the latter were like sunshine, then the boy was like the Highlands afternoon breeze – pleasant but unpredictable.

But the farmer was not unduly worried. After all, he had been placing the boy’s future in the hands of God as he knelt to pray in the chapel every morning. And the boy did not disappoint. The parents, the teachers in school and Sunday School teachers noticed he was a precocious child – a fast learner whose apprehension was quick and memory retentive, who was fast to listen but slow to speak.

Quest of faith

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Sinah Maran Lugun.

Before Christianity, like the other native communities, the Kelabits were pagans who believed in animism. It was from their distant relatives in Indonesia that they heard about the one God who could break all bondages, including the taboos of paganism which had been causing so much hindrance and inconvenience to the Highlands community.

To get to know this God, the leaders of Bario Highlands organised a journey across the Sarawak-Indonesian border to learn more about the Supreme Being.

Long Lellang village chief Murud Tepun, prominent leader Maya Tuan and his daughter (who was to became the farmer’s wife later) and several other village leaders went on the journey. Upon their return, the whole Kelabit Highlands embraced Christianity.

Since they became Christians, life has become more ameliorating and reposeful. The sight of a bird crossing their path on the way to the farm is a joy, not a bad omen prompting them to turn back. The reflex action of pointing at the full moon will not result in their ears being cut off by some roaming spirits in the middle of the night. Life has become simpler and superstitious beliefs no longer hold sway.

Like many places in the world, with the advent of Christianity, education has become a very important tool of knowledge and enlightenment, and for Long Lellang, a primary school was set up in the village to sow the seeds of learning.

Long walk of education

Back then, rural folks who wanted an education had to walk long distances – literally — to acquire it.

The farmer had been to Marudi and noticed a stark difference between his fellow villagers and the town’s traders and administrators who knew how to read, write and count. There and then, he knew he had to make sure his children, with the new addition of a little girl, must emulate the townsfolk to be on par with them.

When the boy turned seven in 1964, the farmer made sure he went to school, however far away it may be from their farm hut.

Being the son of a shifting cultivator, going to school for the boy was not easy as the family usually stayed a distance away from the village. The situation was further complicated by the family’s semi-nomadic lifestyle — moving from place to place every year, depending on the location of the farm. That made schooling for the boy even more challenging.

The boy had to get up early in the morning and walk for an hour or two to the village school to attend class. Being used to the spartan life, he took the ordeal in stride.

With his older brother, he would walk past farms with lush rice fields and trek through virgin jungles every day to and from school. Despite the daunting challenges, the boy continued to work hard in school. For six straight years, he topped his class in SK Long Lellang.

In 1969, the boy sat for the Common Entrance Examination – a transition from primary to secondary education. Out of 17 students in the class, only three passed, including the boy.

Although this was good news, it was, however, beset with the problem of proximity. The nearest school — Bario Secondary School – is a long four days’ walk away! Fortune favours the brave. It was another impediment in a slew of several that the boy had to overcome and he rose to the occasion.

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Scattered mall village settlements in the Kelabit Highlands.

For the boy, the first trip to this secondary school on foot was tiring but not worrisome. Then farmer was on hand to show him the way through the jungles from Long Lellang to Bario. With the farmer alongside, the boy felt safe.

The second trip was quite different. Although only 13, the boy was entrusted to lead the other two girls on the journey. That inspiring experience left an indelible mark in his memory.

On the morning of his initial assignment as the group leader, the whole family woke up early. By 6 am, all the food rations were properly packed in the “uyut” (Kelabit rattan backpack). And his father passed to him all of the family’s saving – RM30.

Although feeling a sense of foreboding, the boy and the two other 13-year-olds started the long walk to school with unwavering purposefulness. For the next four days, they trekked through thick virgin jungles from dawn till dusk without meeting anyone. At night, they rested in jungle huts.

In the hindsight, the boy, now 63, described the whole experience as tough and challenging but memorable and interesting.

“The interesting part was walking for four days, starting at 6 am. You walked the whole day through virgin jungles and didn’t see a soul. I don’t know how we did it,” he mused.

The boy was a boarder at Bario Secondary School and would only return to Long Lellang during the holidays. For every term, it meant eight days of walking and walking through virgin jungles. “But we were used to it. We were brought up like that. Even while staying in the longhouse, like the Ibans and Bidayuhs, we did shifting cultivation. Our parents moved from one place to another, depending on where the farm was that particular year.

“When we were in Primary One, we stayed in the farmhouse which could be as far as two hours from school. So we had to wake up early for the walk to the longhouse to attend class, then back to the farmhouse again in the afternoon.

“After a while, the routine became second nature. They put you in the jungle, you know your direction, you know where you to go,” the boy said.

Riverine way to Marudi

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Isaac was elected the Head Boy of Marudi Secondary School in 1973.

After completing his studies in Bario Secondary School as a top student, the boy enrolled in Marudi Secondary School to further his education. This meant another long journey every term.

By then, he had become such an experienced traveller and so determined to get ahead academically that he refused to let anything distract him from acquiring a full education – not the treacherous streams, hidden rocks or wild animals roaming in the night.

The journey from Long Lellang to Marudi involved a day’s walk and a longboat trip. Although there were outboard engines, the poorer travelers still manually paddled along the river linking the fluviatile settlements. Whether the journey was smooth or rough depended on the water level. Going downstream was comparatively easier than upstream, especially during the dry season where the trip could take a week or longer.

Education in Marudi was not only about studying from books, it was exposure to a different kind of lifestyle. The boy admitted he saw a car for the first time in Marudi. If not for the exposure, the car would be just another textbook picture.

From Marudi Secondary School, the boy followed the path of many rural students of Northern Sarawak by enrolling in Form Six in Tanjung Lobang Secondary School, Miri.

Pocket money had always been a luxury to the boy. As boarder, most of the time, he had to fend for himself as a boarder. But the boy had a way to make his life interesting. Odd jobs such as collecting firewood, cutting grass became part of his life then. Being young and curious, it was worthwhile to toil in some hot afternoons to exchange for a two-hour enjoyment in the cinema or to taste an ice cream to sate his craving.

“So it was a very tough kind of life and upbringing. As I have said, there was no way my parents could afford sending me any pocket money. They were farmers eking out a living on the land. It was tough but we were equally determined to succeed, helped by our religious faith.

“That was what was instilled in us — our faith in God — you must be able to reach beyond yourself. Because of our faith and willingness to work hard, Forms 4, 5 and 6 were quite smooth sailing. There was nothing else to do, anyway,” the boy recalled in a light vein.

For him, leadership was a natural gift. He was head boy of Bario Secondary school, was elected the head prefect of Marudi Secondary School and deputy head prefect in Tanjung Lobang Secondary School.

Setting up of second Penan school

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Isaac’s first appointment letter as temporary teacher where he was entrusted to set up a Penan School at Long Sait.

While waiting for the Higher Secondary Certificate results, the boy took the job as a temporary teacher. His first assignment was to start a school — the second to be set up by the Education Department — for the Penans in Long Sait, a day’s walk from Long Lellang. So the Penan settlement was not a total stranger to him.

The job was actually kept in store for his brother who was doing a teacher’s training course at the time. The two young brothers had a rare combination of attributes – good education and an innate grasp for language and were known for their fluency in Penan.

The boy stood in for his brother until the latter’s graduation. It was 1977 and his main task was to register Penan students.

“The first thing I had to do was to buy school provisions — books and the like. I got help from the Education Department. They chartered a small aircraft to fly me and the school provisions from Miri to Long Lellang. I arranged for porters to bring the stuff to Long Sait.”

After returning to Long Sait, the boy assembled the Penan students near the river in the morning and taught them their first lesson – taking a daily bath with the soap and shampoo he provided. After the introduction to personal cleanliness and hygiene, lessons would start with singing and learning the alphabets.

“At that time, the Penans were still not settled. Most of them, especially during fruit and wild boar seasons, would disappear — and their kids too. So in such a situation, the main purpose was to encourage them to settle down. I think about 30 students of all ages were registered,” the boy recalled.

As a temporary teacher, he was paid RM260 — the first salary he ever received. It was such an overwhelming moment for a poor young man like him that he kept his first payslip to this day. Soon after, his brother graduated and took over from him. The boy was re-posted to Long Lama Primary School. All this while though, he did not give up his dream of reading law, preferably in the United Kingdom. Due to peer pressure, however, he also applied to the University Malaya (UM).

Angels of Northern Sarawak

One day, some three weeks after reporting to Long Lama Primary School, he was called in by the headmaster. Apparently, Marudi Sarawak Administrative Officer (SAO) Ding Ibau, now a priest, had received a telegram, advising that the boy had been accepted to read law in UM with a cautionary afternote that failure to report to the university within two weeks meant he had given up the slot.

Ding who had wanted to do law but did not have the chance, cycled straight to the school to inform the principal who quickly typed out the boy’s resignation before informing the latter of his acceptance by the university.

It isn’t easy to get placement in the Law Faculty of UM in those days. Every year, the intake is only 50 nationwide.

With Ding’s help, the boy was put on a government speedboat to Marudi the next day. Knowing that the boy needed some pocket money while studying in UM, the then-District Officer of Marudi, the late Edwin Dundang, instantly arranged to raise fund.

It was planned for the boy to travel to Miri to look for a certain clinic whose resident doctor was Dr George Chan (former Deputy Chief Minister and now a Tan Sri), the then Lion Club Miri chairman.

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George Chan (left), Edwin (top right) and Ding (Bottom right).

The boy did as told. During their meeting, Dr Chan handed RM3,000 to the boy, the amount raised by the Lions Club of Miri to help him out in university. Subsequently, Dr Chan put the boy on a flight to Kuching with a letter to (the late) Datuk Joseph Balan Seling.

Upon reaching Kuching, the boy was pleasantly surprised to see Balan’s driver waiting for him with a letter to the Immigration Director to expedite his passport application.

The next day, the driver sent him to collect the passport and that same evening, the boy flew to Kuala Lumpur and headed straight to UM where law courses had started a month ago. From then on, the boy subsisted on an annual RM3,000 Petronas scholarship until he graduated.

Boss of multiple companies

After graduation and being bonded, the boy worked for Petronas for eight years. He was instrumental in setting up the Asean Bintulu Sdn Bhd, a subsidiary of the oil company.

This was followed by a posting to Petronas headquarters in Kuala Lumpur as the second person-in- charge of the Legal Department with a team of 42 lawyers.

While working for Petronas, the boy was headhunted by Exxon Mobile, the world’s biggest oil company at the time and a Petronas contractor.

The boy recognised this was another opportunity of a lifetime but as a token of gratitude and respect for Petronas, he left the decision to Petronas president Tun Azizan Zainul Abidin.

With his boss’ blessings, the boy joined the Exxon Mobile legal team and stayed on for the next six years before switching to contracting and procurement.

In 1995, he received a promotion from Exxon Mobile to work in the US as an international procurement advisor. About the same time, Cahya Mata Sarawak Berhad (CMS) headhunted him.

Noting his wife’s reluctance to move overseas and with CMS offering him the chance to come back to his beloved homeland, the boy decided to return to Kuching for an interview and a survey of the living environment.

The family fell in love with Kuching at first sight. Following the job offer from CMS — albeit with a substantial pay cut — the boy turned down the counteroffer from Exxon Mobile with its attractive options of either working from Singapore or London. The boy had made up his mind — it was time to come home.

He started as general manager in CMS, looking after the company’s secretariat and legal department. The portfolio subsequently expanded to cover human resources and corporate communications.

He continued to scale the height of his profession and is now CMS Group managing director and executive director as well as chairman of CMS Land Sdn Bhd.

He also sits on the boards of many companies — Sacofa Sdn Bhd, Samalaju Properties Sdn Bhd, OM Materials (Sarawak) Sdn Bhd, OM Materials Samalaju Sdn Bhd, among others.

This boy is none other than Dato Isaac Lugun, the son of Maran Lugun and Sinah Maran Lugun of Long Lellang, a place you may have heard of for the first and the last time. — DayakDaily

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Dato Isaac Lugun at his residence.

Source: https://dayakdaily.com/the-boy-from-long-lellang/

CMS Employee Tests Negative for Covid-19

Company continues to undertake stringent SOPs across all operations

Kuching (Sarawak), Tuesday, 14 July 2020 – Cahya Mata Sarawak Berhad (CMS) today reported that its employee who was a Person Under Investigation (PUI) connected to the new “Kuching Engineering Cluster” has tested negative for Covid-19. As a result, CMS headquarters at Wisma Mahmud, Kuching will reopen for business in strict compliance with existing standard operating procedures (SOPs) with effect from Wednesday, 15 July 2020.

Commenting on the matter was CMS Group Managing Director, Dato Isaac Lugun who said, “I wish to reiterate that there is no COVID-19 case within the CMS Group and we urge everyone within the Group and the general public to remain calm. We confirm that we have been adhering strictly to all COVID-19 SOPs and guidelines right from the onset of the Movement Control Order across the entire CMS Group.”

“Moving forward, we will continue to strictly comply with all SOPs and guidelines. This includes having only 50% of our workforce at our premises on any certain day as well as conducting daily temperature checks and making health declarations. We will also continue to ensure mandatory mask wearing and social distancing while no outside visitors will be allowed on our office premises, among our other SOPs.”

“We would like to reaffirm that the health and well-being of all our employees and members of the public are our utmost priority and that we will continue to be vigilant in our efforts to help contain the spread of COVID-19. CMS is committed to upholding an honest and transparent work culture and we will continue to remain open in all our dealings with all our stakeholders,” added Dato Isaac.

CMS Posts Lower Q1 Results but is On Track to Regain Business Momentum

Posts Q1 revenue of RM282.45 million and PBT of RM26.81 million

Kuching (Sarawak), Tuesday, 30 June 2020 – Cahya Mata Sarawak Berhad (CMS or the Group) today reported that although its financial performance for the first quarter ended 31 March 2020 (1Q 2020) had dipped, it is taking proactive actions to regain business momentum amidst the Recovery Movement Control Order (RMCO) phase.

For 1Q 2020, the Group posted total revenue of RM282.45 million and a pre-tax profit (PBT) of RM26.81 million – a 32% and 57% dip in revenue and PBT respectively in comparison to 1Q 2019’s revenue of RM418.18 million and PBT of RM62.44 million. The softer performance in 1Q 2020 stemmed from lower revenue contributions by all its Divisions. With the exception of CMS’ Cement Division, all other traditional core businesses reported lower PBT margins. Contribution from associates too decreased by 15% to RM11.39 million from 1Q 2019’s contribution of RM13.35 million.

Commenting on the Group’s Q1 2020 performance, CMS Group Managing Director, Dato Isaac Lugun said: “While CMS’ quarterly results were impacted by external headwinds, including the Movement Control Order (MCO) towards the latter part of the first quarter, we managed to maintain our profitability although at a lower level. Profits for all our businesses shrank with the exception of the Cement Division which posted a 69% improvement in PBT on the back of enhanced operational efficiencies and reduced costs.”

“Like most other businesses whose operations were affected by the sudden but necessary MCO restrictions, we expect our Q2 2020 results too to be adversely impacted. We anticipate that we will only begin making real headway again over the second half of 2020. Nevertheless, following the reopening of our operations across the Group, we are now laser-focused on implementing catch-up strategies to ensure our financial resilience.”

“Our efforts include enhancing operational efficiencies to attain cost savings and strengthening cost control measures including rationalising our capital expenditure (capex). As such, non-essential capex has been minimised, while essential capex will be implemented in stages. On top of this, we continue to preserve cash for business operations and future investment.”

The CMS Group achieved the following results over the first quarter ended 31 March 2020:

The Cement Division’s 1Q 2020 revenue declined by 18% to RM120.25 million as compared to RM146.39 million in 1Q 2019. However, its PBT improved 69% to RM18.59 million as compared to RM11.00 million previously. The improvement in profitability was mainly driven by higher usage of its clinker facilities, lower repair and maintenance costs, as well as cheaper imported clinker. Moving forward, the Division will focus on strengthening operational efficiency by improving its clinker plant production. It is well positioned to capitalise on opportunities related to the expected spike in major infrastructure projects in Sarawak.

The Construction Materials & Trading Division’s 1Q 2020 revenue declined by 31% to RM77.91 million while its PBT contracted by 68% to RM6.72 million. This Division recorded lower revenue from its quarry, premix and trading sectors. The drop in PBT against 1Q 2019 was also partially attributable to a one-off provision reversal amounting to RM9.0 million in 1Q 2019. Given the Division’s involvement in the execution of various infrastructure projects throughout Sarawak, it will be one of the key contributors to the Group’s profitability in 2020.

The Construction & Road Maintenance Division’s 1Q 2020 revenue decreased by 37% to RM81.25 million as compared to RM129.75 million in 1Q 2019. Road maintenance revenue for 1Q 2020 decreased as the road length maintained effective 1 January 2020 was almost half of that maintained previously.  The Division’s road maintenance gross profit margin was also impacted due to the including of more scope under the new road maintenance contract whilst the contract value has remained the same. Meanwhile, the lower revenue from construction works was mainly due to less work performed. The Division’s PBT declined by 60% to RM6.06 million in 1Q 2020 from RM15.33 million in 1Q 2019. The Division’s mid-term prospects are well supported by its order book of some RM1.23 billion.

The Property Development Divisions 1Q 2020 revenue declined by 59% to RM18.34 million in comparison to RM44.55 million in 1Q 2019. This was mainly due to the drop in the number of properties sold. This Division recognised revenue of RM4.4 million from land sale versus RM12.25 million in 1Q 2019. Consequently, its PBT dropped by 71% year-on-year to RM4.38 million in 1Q 2020.

In terms of its Strategic Investments, the Group recorded share of profits from its associates of RM11.39 million in 1Q 2020. This was lower by 15% as compared to the RM13.35 million garnered in 1Q 2019. The lower contribution from associates was mainly due to losses incurred by Kenanga Investment Bank in the first quarter.

Dato Isaac also went on to say, “The current pandemic has brought about significant disruption and uncertainty to businesses and economies globally. CMS’ Management has stepped up its efforts to navigate the turbulence with grit and persistence to ensure that our operations regain the positive momentum that we initially had. We remain focused on growing our portfolio of businesses by taking advantage of three major growth areas within Sarawak. These include opportunities in the area of energy-intensive businesses within the Sarawak Corridor of Renewable Energy (SCORE), the unprecedented spike in infrastructure development within the state, and telecommunications infrastructure development under Sarawak’s Digital Economy initiative.

Commenting on CMS’ strategy moving forward, Dato Isaac said: “CMS will continue to bring into play a three-pronged strategy which will see our team working to reposition and fortify our traditional core businesses; fully implement and grow our strategic businesses; and reposition and strengthen the CMS brand. With our increasingly strong business fundamentals, coupled with other measures taken by Management to position the Group for long-term sustainable revenue and profitability growth, barring unforeseen circumstances, we are cautiously optimistic that we will be able to deliver a satisfactory performance in 2020.”