WCE posts lower 1Q net profit despite sharply higher revenue

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KUALA LUMPUR (Aug 19): Highway construction company WCE Holdings Bhd’s first-quarter net profit fell slightly by 0.44% to RM9.23 million, from RM9.27 million a year earlier, despite a sharp increase in revenue.  

The group said the lower profitability for the quarter ended June 30, 2019  (1QFY19) was due to higher cost of sales, administration, finance and taxation expenses, as well as lower contribution from its associates.  

The quarterly revenue more than doubled to RM383.19 million from RM180.35 million a year ago, thanks to higher construction revenue recognised for the West Coast Expressway project, with a higher rate of construction activities and land acquisition progress payment.  

WCE said four sections of the West-Coast Expressway will be opened for traffic in the current third quarter. The expressway project, which involves the development of a 233km tolled highway from Banting, Selangor to Taiping, Perak (including a 40km stretch of highway to be constructed later), is a build-operate-transfer project with a concession period of up to 60 years. 

On the property market, WCE said it expects the market to remain challenging, as issues of price affordability, the overhang of high priced properties, rising costs of living, and tight financing, continue to have a dampening effect. 

WCE’s share price closed up three sen or 5.77% at 55 sen today, giving it a market capitalisation of RM551.51 million.