KKB’s RM212 mln Petronas contract timely amid engineering division losses

KUCHING (Jan 12): KKB Engineering Bhd’s RM212 million contract win from Petronas Carigali Sdn Bhd is timely, as the group’s engineering division recorded an after-tax loss of RM7.4 million in the third quarter of 2025 (3Q25), according to RHB Investment Bank Bhd (RHBIB).

In a note on Monday, RHBIB said the award marks KKB’s first job win in FY26. The group last secured a contract exceeding RM200 million in January 2023, when it clinched a roughly RM300 million job for three standard wellhead platforms for Sarawak Shell.

The research house noted that the latest contract comes at a critical juncture, as KKB’s steel fabrication arm saw two major projects reach their final stages in 3Q25.

These included the Sarawak Shell project and the Rosmari and Marjoram (R&M) onshore gas plant in Bintulu, a RM112.6 million contract awarded by Samsung E&A Engineering.

As a result, the engineering division saw a loss in 3Q25 from a profit after tax of RM11 million a year earlier.

RHBIB expects KKB to reset its activities in FY25, as existing projects approach completion while the group continues to tender for a new cycle of jobs.

Last Friday, KKB announced that its oil and gas fabrication arm, OceanMight, had received a letter of award from Petronas Carigali for the provision of minor engineering, procurement and construction (EPC) works on fixed offshore structures, as well as host tie-in works at Erb West for the Belud South Greenfield Development project.

The RM212 million job is scheduled for completion within 13 months from Jan 15, 2026.

As at end-4Q25, KKB’s outstanding order book stood at about RM55 million, down from around RM85 million at end-3Q25.

RHBIB estimates the group’s current tender book for engineering, construction and manufacturing at approximately RM700 million.

In addition, the research house projects that KKB will tender for about RM1 billion worth of oil and gas fabrication-related jobs, with an estimated success rate of 30 to 40 per cent.

It noted that some of these contracts are expected to be awarded from 1Q26 onwards.

RHBIB has cut its FY25 to FY27 earnings forecasts by 14 per cent, 4 per cent and 13 per cent, respectively, compared with its earlier assumption of RM100 million in new contracts for FY25 to reflect the lack of new job wins in FY25.