KUALA LUMPUR (Nov 30): Sarawak Cable Bhd (SCable) slipped into the red in its third quarter ended Sept 30, 2017 (3QFY17), dragged down by higher expenses from its transmission lines construction segment.

It reported a net loss of RM38.69 million compared with a net profit of RM7.24 million a year ago. It also posted a loss per share of 12.2 sen compared with an earnings per share of 2.28 sen.

Quarterly revenue fell 4.6% to RM299.31 million in 3QFY17 from RM313.87 million in 3QFY16, led by a significant 78.85% decline in contribution from its transmission lines construction segment.

“The loss was the result of additional expenses the group undertook and incurred for the sole purpose of meeting a project’s completion timeline, and also to meet additional requests from the client,” SCable said in a filing with Bursa Malaysia today.

The group is now in discussion with the client on potential claims for additional works and expenses for the project, which has now been completed.

“We have decided to recognise these additional expenses, including making provisions for potential project costs (and) claw back of profit recognised for this project in previous years,” SCable said.

For the cumulative nine months (9MFY17), the group posted a net loss of RM32.5 million versus a net profit of RM15.75 million a year ago, as projects in hand for its transmission lines construction segment are more than 90% completed.

Contribution from its galvanised products and steel structures segment had also declined.

Revenue dropped 19.6% to RM823.91 million in 9MFY17 from RM1.02 billion in 9MFY16.

SCable said its power generation, helicopter services and corporate division recorded a slight increase in 9MFY17 revenue to RM13.48 million from RM12.76 million the previous year. However, segmental loss increased to RM20.69 million from RM8.89 million.

“The group had a positive start in 2017, but it currently faces challenges in its transmission lines construction segment,” it said.

However, it anticipates improving performance in the coming months as demand for the group’s manufacturing products of power and telecommunication cables remains stable.

Shares in Sarawak Cable closed up 2 sen or 2.53% at 81 sen apiece today, giving the group a market capitalisation of RM256.81 million.