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WCT's 2Q net profit dragged by unrealised forex losses

KUALA LUMPUR (Aug 24): Construction company WCT Holdings Bhd's net profit fell 33% to RM21.48 million in its second quarter ended June 30, 2017 (2QFY17) from RM32.07 million a year ago, after being dragged by unrealised foreign exchange loss of RM16.2 million.

Shrinking topline didn't help — quarterly revenue went down 34% year-on-year to RM383.32 million from RM581.06 million as a result of the completion of a building, WCT said in a filing with Bursa Malaysia today.

For the cumulative six months (6MFY17), however, net profit was up 33% y-o-y to RM54.56 million from RM40.89 million, though revenue was 20% lower at RM856.71 million versus RM1.07 billion previously.

Going forward, WCT said the engineering and construction division is expected to continue to build on its strong order book after securing about RM2 billion worth of new contracts in FY16, backed by the government's infrastructure development and spending.

With a higher proportion of infrastructure-related jobs, WCT expects its overall construction margin to improve, it said.

"Given the Malaysian Government's emphasis on infrastructure development and spending, we are confident that the group is well poised to secure more construction jobs which would contribute positively to our performance for the remaining of 2017 and thereafter," WCT managing director Datuk Lee Tuck Fook in a separate statement.

The group expects its property investment and management unit to continue providing a stable income stream, with higher contribution on the opening of Paradigm Mall in Johor Bahru, and New World Hotel at Paradigm in Kelana Jaya here.

It also said it will continue its de-gearing initiatives such as equity fundraising and assets monetisation to strengthen its financial position and improve gearing level.

It said it should be able to deliver "satisfactory financial results" in the current FY17.

At 3.04pm, WCT shares were up 1 sen at RM1.85, giving it a market capitalisation of RM2.59 billion. — theedgemarkets.com

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