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Ekovest 3Q20 profit down on weaker construction, property and toll op business

KUALA LUMPUR (June 12): Ekovest Bhd's net profit in its third quarter ended March 31, 2020 (3QFY20) fell 71.31% to RM8.43 million from RM29.4 million previously, dragged by weaker performance across all three business segments, which more than offset the lower net finance costs and taxes paid.

Quarterly earnings per share slumped to 0.32 sen from 1.37 sen in 3QFY19, Ekovest’s bourse filing showed.

During the period, Ekovest booked higher costs following a swing away from better margins in the construction segment — the segment’s gross profit fell 46.4% despite an 11.6% increase in revenue, on the completion of higher-margin construction work on the Duta-Ulu Kelang Expressway (DUKE) phase 3.

Meanwhile, the property segment's contribution dropped 75.2% on-year, in absence of the handover of 3 blocks of service apartments in Cheras last year.

Toll operations also slowed by 10.8%, due to the Movement Control Order (MCO) which was enforced on March 18 and decreased traffic volume in the last two weeks of the quarter.

While investment holding revenue rose 4.96% to RM11.19 million from RM10.66 million, rental income declined by RM2.6 million from the previous quarter as it had given its tenants rental rebates in response to the MCO imposed to curb the spread of COVID-19.

Quarterly revenue rose 4.31% to RM344.88 million from RM330.61 million, as the construction segment's gains more than made up for lower contribution from property segment and toll operations.

The weak quarterly performance further dragged Ekovest net profit for the 9-month period ended March 31, 2020 (9MFY20) to RM100.78 million down RM17.81 million or 13.99% from RM117.18 million.

9MFY20 revenue rose 7.96% to RM1.08 billion from RM996.68 million, largely due to better contribution from the construction segment.

On outlook, Ekovest expressed it to be challenging with the continuing implementation of the MCO, which limited traffic flows and stunted construction progress, “severely affecting the group’s operation”.

“Nevertheless, the Board expects the ongoing construction of SPE (Setiawangsa-Pantai Expressway), River of Life beautification packages, the toll revenue and the sales of completed properties to contribute positively to the group’s revenue and earnings for the next financial year,” it said.

Ekovest added that it is eyeing projects with the Federal Government, and is tendering construction jobs in Sabah and Sarawak directly from the Government as well.

Shares of Ekovest slid 1.5 sen or 2.61% to close at 56 sen, valuing the group at RM1.49 billion.

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