WCE 1Q net profit up 4% on higher contribution from associates

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KUALA LUMPUR (Aug 21): Highway construction company WCE Holdings Bhd’s net profit rose 3.8% to RM9.27 million in its first financial quarter ended June 30, 2018 (1QFY19), from RM8.93 million a year ago, mainly due to higher contribution from its associates. 

“The increase is mainly due to the group’s share of results of associates which has increased to RM9.7 million in the current quarter, compared to RM6.7 million in preceding year’s corresponding quarter,” WCE said in a filling to Bursa Malaysia today.

“The higher profit recorded by the associate during the quarter is due to higher work progress from the current ongoing projects, as well as the completion of Phase 7B1 Penduline in the current quarter,” the filing added.

Quarterly revenue also jumped 31.1% to RM180.35 million, compared with RM137.58 million in 1QFY18, mainly due to higher IC interpretation 12 construction revenue recognised for its West-Coast Expressway (WCE) project.

On prospects, WCE said construction is ongoing for its 223km tolled highway from Banting, Selangor to Taiping, Perak. Certain sections are expected to be completed during FY19.

The highway, which is being built on a build-operate-transfer basis, has a maximum concession period of 60 years and cost about RM5.9 billion. 

On the property market, the group expects it to remain challenging, as weak consumer sentiment persists due to uncertain economic prospects, volatility in the ringgit, continued stringent mortgage approval and incoming supply of completed properties. 

Nonetheless, the group said it expects the Bandar Rimbayu development  via its indirect 40%-owned associate Bandar Rimbayu Sdn Bhd to maintain its performance for the coming financial year ending March 31, 2019 (FY19), on the back of unbilled sales and new launches.  

Shares of WCE fell four sen or 4.76% to close at 80 sen today, bringing a market capitalisation of RM802.19 million.