Thursday 28 Mar 2024
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KUALA LUMPUR (Oct 26): WZ Satu Bhd’s fourth quarter ended Aug 31, 2017 (4QFY17) saw its net profit slash more than half (56%) to RM3.49 million or one sen per share, from RM7.93 million or 2.37 sen per share a year ago, dragged by the group’s mining and civil engineering and construction divisions.

WZ Satu is principally involved in civil engineering and construction, oil and gas, as well as manufacturing and bauxite mining businesses.

The group’s board of directors has recommended a final dividend of two sen per share for FY17.

In its quarterly report to Bursa Malaysia, WZ Satu said lower profitability was mainly due to a share of loss in its mining associates' results of RM1.2 million, compared with a share of profits of RM2.2 million in its comparative quarter last year (4QFY16).

“Furthermore, the civil engineering and construction subsidiary registered a lower profit before taxation of RM2.6 million,” WZ Satu disclosed.

Nonetheless, the group’s revenue for 4QFY17 grew by 21.68% to RM150.39 million, from RM123.59 million a year ago.

For the whole FY17, WZ Satu registered a net profit of RM25.35 million, equivalent to a 9.85% growth from RM23.07 million in FY16, while revenue grew 20.29% to RM560.45 million, from RM465.93 million over the same period.

Moving forward, WZ Satu said its current order book of RM1.1 billion will keep itself busy for the coming financial year.

“For the civil engineering and construction segment, the group not only accumulated an order book to last for the next two to three years, but the group is also confident that its order book will grow beyond the run-off rate,” the report read.

“The outlook of this sector is promising with the group benefiting from government expenditure in infrastructure. The group is actively pursuing various opportunities and is optimistic of this segment's contribution in the next financial year,” WZ Satu added.

Additionally, WZ Satu said its wholly-owned subsidiary WZS Misi Setia Sdn Bhd's (MISI) investment in the Automated Pipe Spooling fabrication plant has kicked-off well, leading it to successfully securing contracts in The Refinery and Petrochemical Integrated Development (RAPID) project.

“Year-to-date, MISI has secured additional works on top of existing contracts for RAPID projects,” the report said. 

The group’s bauxite mining prospect in Kuantan, however, remains uncertain due to environmental issues.

“The environmental issues of bauxite mining in Kuantan, Pahang, has resulted in a moratorium imposed by the Federal Government of Malaysia on bauxite mining in Kuantan effective since Jan 15, 2016. Furthermore, the Federal Government introduced a complete ban on bauxite exports in the current quarter under review,” WZ Satu said.

“Until the moratorium and exports ban are lifted, the prospects of the mining segment remains uncertain and would continue to impact the group's results,” the company added.

WZ Satu’s share price gained two sen or 1.83% to RM1.11 today, giving it a market capitalisation of RM383.76 million.

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