WCE Q1 net loss narrows due to lower interest expense and higher share of associated company profits
KUALA LUMPUR (Aug 23): WCE Holdings Bhd posted a narrower net loss of RM14.13 million for the first quarter ended June 30, 2022 (1QFY23) compared to RM27.8 million a year earlier, in a context of lower interest charges and a higher profit share of partners.
Interest expense for the quarter was RM39.5 million compared to RM41.7 million in the same period last year.
The associates’ share of profit of RM12.6 million in 1QFY23 was also higher than the RM5 million recorded for 1QFY22 when construction work was halted due to the enhanced movement control order.
WCE’s loss per share for the quarter narrowed to 0.47 sen from 1.43 sen a year earlier, the group said in a filing with Bursa Malaysia.
Revenue, on the other hand, fell 42.09% to RM105.21 million from RM181.68 million, mainly due to lower IC Interpretation 12 construction revenue for the RM98 million WCE project. , compared to RM175.5 million in the prior year quarter.
Going forward, WCE said its toll operations are expected to incur losses in the early years due to the discontinuation of capitalization of interest charges for completed sections and non-cash expenses related to the amortization of infrastructure development expenditure.
Nonetheless, the start of West Coast Expressway tolling operations should improve the group’s future financial performance in terms of cash flow, he said.
The real estate market is also expected to remain challenging amid price affordability issues, a glut of high-priced properties, rising costs of living, tight financing and the economic impact of Covid-19 continuing to have a moderating effect. “Nevertheless, Bandar Rimbayu should maintain its performance for the coming fiscal year thanks to unbilled sales and the satisfactory response from new launches.”
Regarding its construction division, WCE said that the mixed development project in Kota Seri Langat, which includes the construction of a bridge, main drainage, water pipes as well as associated works for a total amount of 126, 8 million RM, should contribute positively to his future earnings.
WCE’s share price, which has fallen 20.31% year-to-date, closed unchanged at 25.5 sen on Tuesday (23 August), valuing the group at RM761.87 million.