KUALA LUMPUR (May 30): WCT Holdings Bhd's net profit increased 3.7 times to RM33.08 million or 2.64 sen per share in its first quarter ended March 31, 2017 (1QFY17) from RM8.83 million or 0.72 sen per share a year ago, mainly due to strong contribution from the local construction division.

Quarterly revenue, however, fell 2.4% to RM473.39 million in 1QFY17, from RM484.96 million in 1QFY16.

In a statement today, WCT said improvement in net profit despite revenue being marginally lower, is reflective of the group’s ability to derive better margins from projects undertaken by its construction division.

For 1QFY17, WCT’s engineering and construction division was the primary contributor to the group’s performance, as the division recorded an operating profit of RM30.1 million, compared with RM3.7 million in 1QFY16.

The property development and investment division recorded a lower operating profit of RM19.3 million, from RM25.7 million in 1QFY16, on lower revenue recognition from the group’s property development business of RM74.8 million in the current quarter under review, mainly due to slowing sales of property units.

In a filing with Bursa Malaysia today, WCT said it will continue to embark on various de-gearing initiatives such as equity fund raising, as well as assets monetisation which are expected to strengthen its financial position and improve its gearing level.

“As we move forward, we aim to remain focused on our efforts to improve the overall margins from our construction business, by pursuing higher margin infrastructure related jobs and selective specialised building projects to add on to the group’s outstanding order book which stood at RM4.8 billion," WCT group managing director Datuk Lee Tuck Fook said in a statement today.

“For our property development division, we will further intensify our marketing efforts and fine tune product delivery to increase property sales. Meanwhile, our property investment and management division is expected to continue to provide a stable income stream to the group," he added.

Lee added that this year, the group will be adding new assets into its investment properties portfolio, as it targets to complete and open its Paradigm Mall Johor Bahru in Johor and New World Hotel in Petaling Jaya for business.

“All in all, we are cautiously optimistic, as WCT is currently on track to deliver satisfactory results for the financial year ending Dec 31, 2017,” said Lee.

WCT recently announced its plan to undertake a proposed placement of up to 125 million of new shares to improve its cashflow. The first tranche of the proposed placement was completed on April 11, 2017, with issuance of over 100 million shares, raising RM178 million in proceeds.

WCT shares closed up 1.42% or 3 sen at RM2.14 per share yesterday, with 1.4 million shares done, giving it a market capitalisation of RM2.98 billion. — theedgemarkets.com

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