WCT 3Q net profit down 35.6% on lower infrastructure project billings

KUALA LUMPUR (Nov 26): WCT Holdings Bhd reported a 35.6% decline in net profit for its third financial quarter ended Sept 30, 2018 (3QFY18) to RM26.13 million from RM40.55 million a year ago, on lower revenue as a result of lower billings from local and overseas infrastructure projects.

In a filing with Bursa Malaysia this evening, WCT also attributed its decline in profitability to lower property sales during the period. Earnings per share was 1.89 sen versus 2.92 sen.

Revenue for 3QFY18 came in 17.8% lower at RM385.78 million, compared with RM469.25 million in 3QFY17.

For the cumulative nine months ended Sept 30, 2018 (9MFY18), WCT reported a 14.4% increase in net profit to RM108.29 million from RM94.64 million a year ago, mainly due to higher revenue from its engineering and construction division.

Revenue for 9MFY18 grew by 20.4% to RM1.59 billion, from RM1.32 billion in 9MFY17.

Earnings per share for 9MFY18 recorded an improvement at 7.73 sen, compared with 6.99 sen in 9MFY17.

Dato’ Lee Tuck Fook, Group Managing Director of WCT, said in a statement: “WCT’s performance for the current year to date has been in line with our expectations, amidst challenging market conditions. 

"Our Engineering and Construction Division continues to be the primary contributor, accounting for 78% of the Group’s consolidated revenue. This year, we have successfully replenished over RM2.3 billion worth of new construction jobs, raising our outstanding order book close to RM7 billion.”

For the current year to date, WCT’s Engineering and Construction Division recorded an operating profit of RM121 million (3Q FY2017: RM100 million) on the back of a revenue of RM1.24 billion (3Q FY2017: RM928 million).

Revenue from the Property Development Division was lower at RM225 million (3QFY2017: RM347 million), mainly due to lower property sales registered during the period, reflecting a weaker property market. Despite the lower revenue, the division recorded a higher operating profit of RM55 million (3QFY2017: RM47 million) due to land sales.

The operating profits of the Group’s Property Investment and Management Division surged to RM71 million (3QFY2017: RM24 million) on the back of higher revenue of RM132 million (3QFY2017: RM50 million), due to additional contribution from Paradigm Mall Johor Bahru.

“Looking ahead, we remain optimistic with the prospects of our Engineering and Construction Division and our current order book of RM7 billion will provide visibility to our revenue and earnings for the next 3 to 4 years.”

Lee said the group remains cautious in launching any new property projects moving forward, and would focus efforts primarily towards reducing inventory and improving operational cash flow.

“As for our Property Investment and Management Division, we aim to further enhance our offerings and services to add new vibrancy to our existing malls, as well as to improve shoppers' overall shopping experience." — theedgemarkets.com

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