KPS Berhad’s 1Q26 Revenue Moderates Amidst Cautious Demand Environments

 
SHAH ALAM, Malaysia, May 25 (Bernama) -- Kumpulan Perangsang Selangor Berhad (“KPS Berhad” or “the Group”) (KPS, Bursa: 5843; Bloomberg: KUPS:MK; Reuters: KPSB.KL) today announced its financial results for the first quarter ended 31 March 2026 (“1Q26”). Against a backdrop of cautious demand conditions and measured customer procurement activities across the manufacturing sector, KPS Berhad recorded a lower revenue of RM208.2 million compared with RM243.5 million in the corresponding quarter last year (“1Q25”). Operating profit correspondingly moderated to RM8.6 million from RM13.7 million year-on-year (“YoY”), affected by lower production volumes, weaker operating leverage and net foreign exchange losses. Consequently, profit after tax and zakat (“PAT”) declined to RM2.7 million, compared with RM8.2 million in 1Q25.
 
HIGHLIGHTS FOR THE QUARTER ENDED 31 MARCH 2026
 
The operating environment remained cautious during the quarter amidst persistent geopolitical tensions in the Middle East and uneven global demand conditions, which continued to weigh on customer planning visibility and confidence across parts of the manufacturing sector. Inventory replenishment activities remained measured, as customers adopted a more circumspect procurement approach and increasingly staggered ordering patterns, particularly within consumer electronics-related segments. Meanwhile, the packaging sector continued to face pricing pressures arising from high competition and low-cost imports from China.
 
Revenue consequently moderated to RM208.2 million for the first quarter of 2026, representing a 14% decline compared with RM243.5 million in the same quarter last year. The manufacturing business remained the Group’s main revenue contributor, contributing RM171.7 million compared with RM204.1 million in 1Q25.
 
Toyoplas Manufacturing (Malaysia) Sdn Bhd (“Toyoplas”) remained the Group’s largest revenue contributor this quarter at RM74.3 million, albeit lower by RM26.3 million YoY due to softer order volumes amidst ongoing customer recalibration activities and cautious demand visibility across selected end markets. The lower contribution was further affected by a key customer’s adjustment in contract manufacturing allocation during the quarter. Nevertheless, contributions from new projects in Vietnam partially mitigated the decline.
 
CPI (Penang) Sdn Bhd (“CPI”) recorded revenue of RM46.5 million, down RM6.3 million from RM52.8 million previously, mainly due to lower sales across most business segments except healthcare, which continued to benefit from new project contributions. Topline performance was further moderated by the stronger Ringgit Malaysia against the US Dollar, as a meaningful portion of CPI’s sales remained denominated in USD.

 
MDS Advance Sdn Bhd (“MDS Advance”) maintained a relatively stable revenue of RM5.1 million compared with RM5.2 million in 1Q25. This was supported by the fulfilment of selected customer project requirements within its medical-related segment. This was despite a higher comparative base arising from certain customers front-loading deliveries within the electronics segment in the corresponding quarter last year.
 
Meanwhile, Century Bond Bhd (“CBB”) recorded revenue of RM45.8 million, broadly in line with the corresponding quarter last year. The paper division provided a stable contribution during the quarter, partially cushioning weaker demand conditions and continued pricing pressures across the carton division amidst intense competition within the packaging sector.
 
The trading business, represented by Aqua-Flo Sdn Bhd (“Aqua-Flo”), contributed RM36.5 million to the Group’s revenue, compared with RM39.4 million in 1Q25. The lower contribution was mainly attributable to weaker chemical sales amidst evolving procurement dynamics. Nevertheless, contributions from water meters and project-related activities continued to provide support to the overall performance of the trading business.
 
The Group recorded an operating profit of RM8.6 million compared with RM13.7 million a year earlier. The lower operating profit was primarily attributable to weaker fixed cost absorption arising from lower production volumes across several manufacturing subsidiaries. The impact was compounded by a RM1.0 million net foreign exchange loss during the quarter. The Group also recorded a RM0.4 million share of loss from associates compared with a RM0.8 million share of profit previously, primarily due to lower contribution from NGC Energy Sdn Bhd.
 
Against this backdrop of softer demand conditions and weaker operating leverage across manufacturing subsidiaries, PAT correspondingly retreated to RM2.7 million from RM8.2 million in 1Q25.
  
MANAGING DIRECTOR/GROUP CEO’S REVIEW OF PERFORMANCE
 
The softer performance this quarter reflected the measured operating environment across parts of the manufacturing sector, as customers continued to adopt cautious procurement and inventory management approaches amidst ongoing geopolitical and macroeconomic uncertainties. Demand visibility across selected consumer electronics-related segments also remained uneven during the period. Our customers continued to adopt measured inventory replenishment and production planning activities amidst broader cyclical demand moderation, resulting in softer order volumes at Toyoplas, CPI and CBB.
 
Against this backdrop of constrained visibility, the Group remains focused on strengthening operating resilience to preserve long-term competitiveness and maintaining disciplined operational execution across its subsidiaries.
 
Operational resilience initiatives continue to be reinforced through ongoing cost optimisation and operational efficiency measures; for example, the solarisation initiatives at Toyoplas and CPI, as well as the planned development of Centralised Labour Quarters (CLQs) to support workforce stability and operating efficiencies across selected manufacturing operations. Concurrently, the Group continues to strengthen long- term competitiveness through capability enhancement initiatives and internationally recognised operational standards, including Responsible Business Alliance (RBA) accreditation efforts undertaken at CBB, Toyoplas, CPI, in line with evolving customer expectations and supply chain requirements.