Zecon sinks into the red in 4Q, plans another private placement

Zecon sinks into the red in 4Q, plans another private placement
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KUALA LUMPUR (Aug 30): Zecon Bhd has sunk into the red with a net loss of RM10.98 million, with a loss per share of 8.38 sen, in its fourth quarter ended June 30, 2019 (4QFY19), as revenue dived 60.48% to RM79.85 million while finance costs came in higher.

In contrast, the group recorded a net profit of RM33.22 million with an earnings per share of 26.57 sen a year ago, when it booked revenue of RM202.06 million. Finance costs, which was at RM4.63 million a year ago, rose 56% to RM7.2 million in 4QFY19.

Following the weak quarterly performance, the group posted a net loss of RM19.74 million for the full year ended June 30, versus a net profit of RM13.23 million a year ago. Revenue was down 20.4% at RM372.04 million versus RM467.36 million previously, amid lower progress billings on projects.

On prospects, Zecon said its revenue is still expected to be derived from phase 1 of the Pan Borneo Highway project, the Children's Specialist Hospital project at Universiti Kebangsaan Malaysia, and its contract with Petronas Gas Bhd.

Its business development unit is also actively bidding for new projects, particularly those in Sarawak, besides working on the internal development of its existing land bank.

Meanwhile, the group, which has just completed a private placement involving 10% of its shares to raise RM3.28 million, said it plans to undertake another private placement involving up to 30% of its total issued shares to raise funds. It did not state the purpose for raising the funds.

Zecon shares fell 1.5 sen or 4.5% to 32 sen today, bringing it a market capitalisation of RM46.12 million. The stock has retreated nearly 15% in the past year.