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Ekovest 2Q net profit down 30% q-o-q as construction, toll segments drag amid renewed lockdown

KUALA LUMPUR (Feb 26): Ekovest Bhd's net profit declined 29.64% to RM7.64 million in the second quarter ended Dec 31, 2020 (2QFY21) from RM10.86 million in the immediate preceding quarter of 1QFY21, despite stronger revenue, due to weaker contribution from its construction and toll segments.

Construction segment  for the quarter reported a lower gross profit of RM34.22 million compared with RM39.46 million in 1QFY21. Toll operations also recorded lower gross profit of RM23.04 million versus RM31.47 million previously, amid lower traffic volume recorded during the October to December period, following the re-imposition of lockdown measures by the government.

Its quarterly earnings were further dragged by a provision for additional cost, as a result of Covid-19's impact, the group said in its bourse filing yesterday.

Revenue for the quarter grew 14.4% quarter-on-quarter to RM358.95 million from RM313.77 million, due to the consolidation of PLS Plantation Bhd's earnings on completion of the unconditional mandatory general offer to acquire the remaining PLS shares and warrants not held by Ekovest on Dec 11, 2020.

On a year-on-year (y-o-y) basis, the company's net profit slumped 73.67% from RM29.03 million in 2QFY20, as all of the group's businesses reported lower contributions, in addition to lower interest income of RM3.71 million — down 66.9% from RM11.19 million previously. Revenue slipped 6.6% from RM383.31 million. 

For the cumulative six months ended Dec 31 (6MFY21), its net profit shrank 80% to RM18.51 million from RM92.35 million in 6MFY20, while revenue declined 8% to RM672.72 million from RM731.11 million.  

On prospect, the board remained optimistic in delivering positive financial results and expects its new plantations business, together with the ongoing construction of SPE (Setiawangsa-Pantai Expressway), River of Life beautification packages, its toll revenue and the sales of completed properties, to contribute positively to its revenue and earnings for FY21.

The group also said it is continuously working closely with the government on various infrastructure projects that have been proposed to the government. “The board is hopeful that the company is able to secure some of these projects and the board will continue to review the financial impact and monitor any opportunity to launch new property development projects for the current financial year,” it added.

Shares of Ekovest closed unchanged at 47.5 sen today, valuing the group at RM1.28 billion. There were 4.5 million shares traded.

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