Vertice falls into the red in FY17 after four losing quarters

KUALA LUMPUR (Feb 28): Vertice Bhd, which has a 13% stake in Penang undersea tunnel developer Consortium Zenith Construction Sdn Bhd (CZC), posted its fourth consecutive losing quarter today on expenses incurred for multiple corporate exercises, higher administrative spending and a loss in its retail division.

Its net loss for the fourth quarter ended Dec 31, 2017 (4QFY17) came in at RM2.9 million, versus a net profit of RM642,000 a year ago. That's a loss per share of 2 sen against an earnings per share of 0.49 sen a year ago, according to its Bursa Malaysia filing.

Its retail division was impacted by higher cost of goods and lower gross profit margin from year-end sales activities, Vertice said.

In terms of quarterly revenue, Vertice saw a 17% year-on-year growth to RM60.77 million from RM52.12 million, after registering higher retail sales volume and progress billings from its construction division.

After incurring losses for four straight quarters, Vertice fell into the red in the full FY17 with a net loss of RM4.82 million, compared with a net profit of RM674,000 in FY16, despite a 23% rise in revenue to RM207.69 million from RM168.85 million, with higher contributions from both its construction and retail divisions.

Going forward, Vertice said it expects its fashion retail business to be challenged by price competition, weak local currency exchange rates and higher wages.

As for its construction business, it plans to pursue more projects in 2018, as it continues to diversify into the sector. It currently has a build-up order book of RM172 million.

“At the same time, the group will continue with its diversification into property development and property investment, which will provide additional streams of earnings,” Vertice said.

Shares in Vertice declined 2 sen or 2.27% to 86 sen as at 3.48pm today, giving the group a market capitalisation of RM124.87 million.

Yesterday, Pilgrims Fund Board (Tabung Haji) chairman Datuk Seri Abdul Azeez Abdul Rahim, whom CZC accused of failing to provide consultancy services for the Penang undersea tunnel, said he does not know the company. — theedgemarkets.com

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