New contracts poised to buoy Kelington Group

PETALING JAYA: Kelington Group Bhd remains optimistic on its performance growth for the financial year ending Dec 31, 2025 (FY25) underpinned by a robust order book and continued momentum in its ultra high purity (UHP) and industrial gases segments amid mounting global economic uncertainties.

In FY24, the group posted a higher net profit of RM124.3mil, up by 19.4% from RM104.1mil in FY23. Its revenue, however, dropped slightly to RM1.27bil in FY24 from RM1.61bil.

Kelington’s order book stands at RM1.27bil as at Dec 31, 2024, and the group is noted to have consistently secured over RM1bil in new contracts annually.

The UHP segment remained as the group’s primary growth driver, making up 71% of the outstanding order book for FY24 – amounting to RM910mil.

In Kelington’s Annual Report 2024, the group stated that maintaining a strong presence in the UHP space is beneficial, given the higher profit margins associated with such contracts.

The group said the demand surge in UHP is closely tied to the global semiconductor growth, fuelled by advancements in artificial intelligence, digitalisation, and the push for technological self-sufficiency, particularly in China.

Additionally, the segment’s strongholds also remain in markets like Singapore, India, Europe, and Hong Kong, where the semiconductor value chain continues to expand.

In Malaysia, Kelington noted that government initiatives, particularly the National Semiconductor Strategy (NSS), play a key role in shaping the sector’s outlook.

“The successful execution of NSS will be essential in strengthening Malaysia’s position within the global semiconductor value chain, attracting high-value investments, and enhancing local supply chain capabilities, ensuring the country remains competitive in the evolving semiconductor landscape,” it stated.

Initiatives such as the upcoming Integrated Circuit Design Park and a RM1.11bil investment to acquire chip intellectual property rights from Arm Holdings are expected to lay the foundation for a stronger domestic ecosystem.

Kelington believes these efforts align with its capabilities, though outcomes will take time to materialise.

Beyond its UHP segment, Kelington is increasingly turning to its industrial gases business as a key pillar of future growth.

“We continue to see strong demand for high-purity liquified carbon dioxide (LCO2), with increasing enquiries from food and beverage manufacturers across multiple regions.

“This reflects the essential role of LCO2 in carbonated beverages, food preservation, and other applications, further supporting the group’s growth trajectory in the industrial gases market,” it added.

Kelington’s acquisition of the remaining 9.29% equity in Ace Gases Sdn Bhd in November last year gives it full ownership and allows the group to consolidate 100% of the company’s profits.

This move is expected to improve operational efficiencies and support expansion efforts.

Meanwhile, the Kerteh LCO2 plant, which also serves as a carbon capture facility, positions the group to explore new opportunities in the carbon capture, utilisation and storage sector.

With ongoing geopolitical tensions and tariff uncertainties, Kelington said it will continue focusing on strategic cost management, disciplined cash flow, and strengthened client relationships.

The group believes its experience navigating past challenges, including the Covid-19 pandemic, has prepared it for the road ahead.