Litrak 4Q net profit tumbles 47% on-year, hit by higher amortisation of highway development expenditures, share loss of Sprint

Litrak 4Q net profit tumbles 47% on-year, hit by higher amortisation of highway development expenditures, share loss of Sprint
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KUALA LUMPUR (May 30): Lingkaran Trans Kota Holdings Bhd’s (Litrak) net profit tumbled 20.86% to RM162.85 million for the financial year ended March 31, 2022 (4QFY22), from RM205.78 million a year ago, despite chalking up higher revenue.

The highway concession holder blamed the lower profitability to higher amortisation of highway development expenditure (HDE) and higher loss in Sprint group of RM10 million due to higher amortisation of HDE, as well as higher income tax expense resulting from the impact of prosperity tax.

Hence, earnings per share dropped to 30.56 sen per share, from 38.66 sen a year before, its filing with Bursa Malaysia showed.

Revenue however rose 2.06% to RM400.93 million from RM392.83 million, as it recorded higher tollable traffic volume in the current year due to easing of travel restrictions and interstate travel, which has been allowed from Oct 11, 2021 for fully vaccinated individuals. From Oct 18, 2021, Selangor, Kuala Lumpur and Putrajaya has moved to Phase 4 of the National Recovery Plan and the whole of Malaysia moved to Phase 4 of the NRP from Jan 3, 2022 to March 31, 2022.

In view of the government’s move to continue freezing toll rate hikes for all highways, Litrak said revenue growth can only be achieved by tollable traffic growth.

As the country has begun its transition to the endemic phase of Covid-19 on April 1, 2022, the group is of the view that the tollable traffic will return to the pre-MCO level.

Meanwhile, Litrak said it is in the midst of finalising the terms and conditions of the definitive agreement with Amanat Lebuhraya Rakyat Bhd (ALR) in respect of ALR’s offer to acquire all securities of Lingkaran Trans Kota Sdn Bhd and Sprint.

"The status of the fulfilment of the conditions precedent is still ongoing and the proposed disposals are yet to complete," it noted.  

Litrak noted that it would become a cash company following the successfully completed proposed disposals, as it may not have a core business other than being an investment holding company.

Shares price of Litrak settled unchanged at RM4.66 on Monday (May 30), valuing it at a market capitalisation of RM2.5 billion.

Kamarul Azhar