KUALA LUMPUR (July 8): Westports Holdings Bhd said it has overprovided for deferred tax liabilities by RM17 million in its financial results for the first quarter ended March 31, 2022 (1QFY22), which has resulted in the reported effective tax rate of 39% for the quarter.

As such, the amount will be reversed in the financial results for 2QFY22. Deferred tax liabilities represent income tax payable in future periods.

"The adjustment relates to the application of the prosperity tax rate of 33%. The temporary differences as of the previous financial year ended Dec 31, 2021 were provided based on the appropriate tax rate either at 24% or 33% according to the guidelines or standards," it said in a filing with Bursa Malaysia on Friday (July 8).  

According to Westports, for 1QFY22, it has applied a 24% income tax rate instead of an income tax rate of 33% for certain temporary differences that were brought forward from FY21, resulting in an overprovision of deferred tax liabilities by RM17 million.

On April 26, Westports announced that after making a tax provision of RM97 million or an effective tax rate of 39% due to the prosperity tax, it reported a lower net profit of RM151.85 million for 1QFY22, which was a 27.1% decline from RM208.32 million a year ago.

Revenue for the quarter, however, rose by a marginal 1.6% to RM516.36 million from RM508.16 million in 1QFY21.

At noon break, Westports shares were down one sen or 0.28% at RM3.60, bringing the company a market capitalisation of RM12.28 billion.