WCE Holdings' loss widens by more than threefold in 3Q on higher interest costs

• WCE Holdings updated that the construction of Section 11 of the WCE project has been completed and is currently at the inspection stage.

KUALA LUMPUR (Feb 27): Highway concessionaire WCE Holdings Bhd's net loss has widened by more than threefold to RM22.39 million in its third financial quarter ended Dec 31, 2023 (3QFY2024), from RM6.77 million a year earlier, mainly due to an increase in interest expense incurred in relation to project financing for completed sections of the West Coast Expressway (WCE) project.

The interest cost was recorded at RM38.8 million compared with RM34.7 million previously, according to the group's exchange filing on Monday.

WCE Holdings has been loss-making for the last three consecutive quarters.

Quarterly revenue rose 18.6% to RM177.67 million from RM149.84 million in 3QFY2023.

For the nine-month period, WCE Holdings incurred a bigger net loss of RM72.98 million, compared with a net loss of RM62.18 million in the previous corresponding period, despite revenue climbing 39.5% to RM524.22 million from RM375.71 million.

WCE Holdings updated that the construction of Section 11 of the WCE project has been completed and is currently at the inspection stage. This section, which will be the sixth of 11 sections to be opened to the public, is expected to be launched soon.

The completion of this section signifies the full completion of the Perak alignment, spanning 120km within the WCE project.

"With direct access now available from the North South Expressway (NSE) at Changkat Jering to our highway, this alignment holds immense significance to the region’s infrastructure.

"The group holds an optimistic outlook on the completion of this section, anticipating a significant increment in the traffic volume as well as long haul traffic along our WCE alignment," WCE Holdings said.    

WCE Holdings is targeting to complete another two sections by March 31. These are Section 1 (Banting - South Klang Valley Expressway or SKVE) and Section 2 (SKVE - Shah Alam Expressway or Kesas).

Meanwhile, the final three sections, namely Section 3 (Kesas - Federal Highway Route 2), Section 4 (Federal Highway Route 2 - New North South Klang Straits Bypass) and Section 7 (Assam Jawa - Tanjung Karang) are targeted for completion by 2025.

"Going forward, the additional sectional toll revenue is expected to further improve the future financial performance of the group in terms of cash flows and operating results," WCE Holdings added.

As for the existing five operational sections of the WCE project, the group said it has witnessed steady traffic volume, with an increase of 29% from the preceding year.

"During the recent Christmas festive period in December 2023, the traffic volume achieved a peak of 140,000 average daily traffic," it said.

The WCE project involves the development of a 233km toll highway from Banting, Selangor to Taiping, Perak. The build-operate-transfer project has a concession period of up to 60 years effective from Dec 20, 2013.

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