Econpile sees first quarterly loss since its listing

KUALA LUMPUR (Feb 26): Econpile Holdings Bhd — since its listing on Bursa Malaysia in 2014 — saw its first quarterly net loss of RM34.45 million in the three months ended Dec 31, 2018 (2QFY19), versus a net profit of RM22.73 million a year ago.

The weaker performance was due to a 30.7% jump in cost of sales to RM168.89 million from RM129.26 million, while revenue retreated 8.6% to RM148.18 million from RM162.17 million.

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Consequently, it booked a loss per share of 2.58 sen in 2QFY19 against an earnings per share of 1.7 sen in 2QFY18, according to its quarterly results announcement yesterday.

For the first-half ended Dec 31, 2018 (1HFY19), Econpile saw a net loss of RM19.4 million versus a net profit of RM43.92 million in 1HFY18, despite revenue rising 8.3% to RM348.48 million from RM331.07 million.

“While there was a slight increase in revenue for the six months [in the] current financial period compared with the corresponding period, the group’s performance was affected by losses of approximately RM18.5 million caused by a delay in and idling costs from two infrastructure projects caused by the overall project rationalisation of costs and changes in the design and/or scope of work by the main contractors; and a cost overrun of approximately RM15.4 million for a property development project.

“The group’s loss before taxation was also affected by an impairment of trade receivables of RM15.1 million as a result of the appointment of a Receiver and a Manager by a secured creditor against a particular debtor in November 2018,” it said.

Notwithstanding the challenges faced in 2QFY19, Econpile said it “remains optimistic about new job wins in property developments in the private sector and also technically challenging infrastructure projects involving civil engineering and deep-basement works”. It also expects the construction sector’s outlook to remain positive for FY19.

Econpile shares fell two sen or 3.64% to 53 sen yesterday, with a market capitalisation of RM708.87 million. In the past 12 months, the stock has declined nearly 55%.

This article first appeared in The Edge Financial Daily, on Feb 26, 2019.

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