Ekovest swings into the red in 3Q as construction business sees lower revenue

KUALA LUMPUR (June 1): Ekovest Bhd reported a net loss of RM7.96 million for its third quarter ended March 31, 2022 (3QFY22), versus a net profit of RM27.54 million a year earlier, amid lesser contribution from its construction segment.

Quarterly revenue dropped 44.74% to RM168.28 million from RM304.51 million previously, according to the group’s filing.

Ekovest said the construction sector reported a lower revenue of RM69.24 million, compared with RM251.17 million in 3QFY21. Correspondingly, gross profit for the sector also reduced to RM13.34 million from RM53.46 million.

“Even with gradual recovery from the easing of MCO [movement control order] restrictions, this segment has reported lesser construction activities due to slower supply of building materials and foreign labour shortages, which takes time to improve and recover to pre-MCO period,” said Ekovest.

For the nine months ended March 31, Ekovest registered a net loss of RM1.17 million against a net profit of  RM46.05 million in the previous corresponding period.

Revenue declined 42.33% to RM584.11 million, from RM977.23 million.

Going forward, the group expects its performance to remain challenging with uncertainties resulting from the Russia-Ukraine war and the increasing material and petrol prices.

“However, with the new plantations segment, the ongoing construction of SPE [Setiawangsa-Pantai Expressway] and the toll revenue, the board is hopeful that these segments would contribute positively to the group’s revenue and earnings in the current financial year.

On the other hand, the group said it is continuously working closely with the government on various infrastructure projects which have been proposed earlier, adding that it is hopeful to secure some of these projects.

“The company is also currently planning to launch property development projects in the Klang Valley, following the re-introduction of HOC 2020/2021, which is expected to be an important catalyst to stimulate property sales in Malaysia. However, the Board will review the financial impact and monitor closely on any new property development project before launching,” Ekovest explained.

Ekovest shares settled at 41.5 sen on Tuesday (May 31), down half a sen or 1.19%. This values the group at RM1.12 billion.

Edited by S Kanagaraju.

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