MARC Ratings has affirmed the rating of George Kent (Malaysia) Berhad’s Islamic Commercial Papers (ICP) Programme at MARC-1IS and its Islamic Medium-Term Notes (IMTN) Programme at A+IS/Stable. In March 2026, the group redeemed its RM132 million outstanding IMTN using internally generated funds and subsequently issued RM80 million under the existing IMTN Programme. As at end-June 2026, the total outstanding under the IMTN Programme stood at RM80 million.
The ratings are underpinned by George Kent’s more than 90-year track record in the water metering industry, healthy balance sheet, and net cash position. These strengths are moderated by the construction segment’s exposure to variable project flows as well as raw material cost volatility.
George Kent’s metering segment recorded a gradual recovery in FY2026 following several years of softer demand. Sales volume increased by 21.3% to 2.7 million units, while metering revenue rose to RM135.3 million from RM123.8 million. Segment profit improved to RM25.7 million from RM19.2 million, with margin expanding to 19.0% from 15.5%. MARC Ratings expects the metering segment to remain the group’s primary earnings contributor, supported by domestic demand, regional expansion and product development initiatives. Export markets are expected to remain a key growth driver, while the group’s ongoing collaboration with Qingdao Topscomm Communication Co. Ltd to develop an ultrasonic water meter, targeted for commercial launch by end-2026, should broaden its product offering and support future market expansion.
The construction segment also improved in FY2026, with revenue increasing to RM32.5 million from RM13.7 million, supported by higher progress billings from ongoing water infrastructure and rail-related projects. Segment losses narrowed to RM1.6 million from RM3.7 million, while the outstanding order book stood at approximately RM75.0 million as at end-April 2026. Nevertheless, the segment remains project-driven, with further recovery dependent on the timely conversion of the group’s tender pipeline into new contract awards.
In June 2026, George Kent entered into a conditional share sale agreement to acquire a 76% equity interest in Techkem Water Technologies Sdn Bhd for RM2.0 million. The acquisition is expected to strengthen the group’s water and wastewater treatment capabilities. Given the modest purchase consideration and funding through internally generated funds, the proposed acquisition is not expected to materially affect George Kent’s financial profile. On a pro forma basis, George Kent’s debt-to-equity (DE) ratio would increase only marginally to about 0.35x from 0.32x.
In FY2026, revenue increased by 22% y-o-y to RM167.8 million, supported by higher contributions from both the metering and construction segments. Despite the stronger operating performance, George Kent recorded pre-tax loss of RM16.8 million, mainly due to net foreign exchange losses and a share of associate losses. For a better assessment of the group’s underlying operating performance, foreign exchange gains/(losses) in both periods and the one-off impairment reversal recognised in FY2025 have been excluded. On this basis, adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) improved to RM25.3 million from RM19.4 million. George Kent’s total debt declined to RM148.1 million as at end-March 2026 from RM203.1 million in FY2025, improving the DE ratio to 0.32x from 0.41x. Liquidity remained adequate, with cash and bank balances of RM172.9 million, while the group maintained a net cash position.