Equine Capital’s 3Q losses narrow

KUALA LUMPUR: Main-board listed Equine Capital Bhd. saw its third quarter losses for its financial year ending March 31, 2010 narrow to RM8.2 million from a loss of RM22.66 million for the same period in the previous financial year. Losses narrowed on the back of decreased 3Q revenue of RM7.62 million from RM14.47 million in the same quarter a year earlier.

According to a statement to Bursa Malaysia on Feb 3, for the nine-month period ending Dec 31,2009, the company’s revenue declined 21.6% to RM58.01 million from RM74.02 million in the same period a year ago. While losses after tax for this nine-month period narrowed to RM10.86 million from RM24.77 million in the preceding period one year ago.

Losses per share in 3Q reduced to 3.61 sen from 9.97 sen in the same quarter a year ago, while losses per share for the nine-month period until Dec 31, 2009 narrowed to 4.78 sen from 11.87 sen in the same period a year ago.

The company recorded a revenue of RM7.6 million and a pre-tax loss of RM9.1 million for the quarter under review against the previous quarter’s (2Q) revenue of RM27.2 million and pre-tax loss of RM970,000.

Equine said revenue for the current quarter was derived mainly from the sales of bungalow lots in Equine Park, Seri Kembangan and continued recognition of construction progress of its on-going development projects in Seri Kembangan, Cheras and Batu Kawan in Penang.

The company explained that actual revenue for the current quarter is RM13.8 million, because of a sales reversal. The company dented its coffers after the termination of two sales and purchase agreements (SPAs) for the sale of land which were transacted in November 2002 and which cost RM6.2 million. The termination of the two SPAs also necessitated a write back of profit amounting to RM4.2 million, which has been included in the provision for losses from potential sales revocation of RM11.5 million made in the previous financial year’s accounts.

The lower revenue in the current quarter compared with the preceding quarter was mainly due to lower sales quantity of bungalow lots. The company also attributed its losses to additional provisions for liquidated and ascertained damages totalling RM2.7 million due to a delay in completion for its Batu Kawan projects. Losses were also due to a charge out over-capitalised development expenditure of Batu Kawan projects totalling RM2.4 million and a disposal of a parcel of leasehold land in December 2009, which knocked out RM0.9 million from its balance sheets.