Ekovest’s net loss rises in Q4 as construction and real estate investment revenue declines
- The group attributed the decline in revenue to lower construction activity caused by slower lead times for construction materials.
- The real estate development, toll operations and plantations segments of Ekovest performed better.
KUALA LUMPUR (August 30): Ekovest Bhd’s net loss for the fourth quarter ended June 30, 2022 (4QFY22) climbed to RM123.81 million from RM2.66 million a year earlier, driven by a contribution weaker in the construction and real estate investment segments.
This led to an increase in its loss per share to 4.59 sen in 4QFY22 from 0.1 sen a year ago, according to the group’s filing with Bursa Malaysia.
Revenue for 4QFY22 fell by 40.47% to RM224.49 million from RM377.11 million the previous year.
Ekovest said the construction sector recorded a decline in revenue of RM72.75 million in 4QFY22 compared to RM288.52 million in 4QFY21. As a result, the segment recorded a gross loss of RM5.64 million in 4QFY22 compared to a gross profit of RM118.21 million in 4QFY21
The group attributed the decline in revenue to lower construction activity caused by slower lead times for construction materials. The delay was caused by the various Movement Control Orders (MCOs) previously implemented by the government.
“Additionally, provisions were made during this quarter to reflect the anticipated rise in the cost of construction materials after MCO, which affects the entire construction industry,” he explained.
Meanwhile, Ekovest said segment rental income fell to RM6.49 million as of 4QFY22 from RM7.65 million a year ago, mainly due to tenants terminating their leases. with the Ekocheras shopping center. The segment’s gross profit also fell to RM1.04 million from RM3.45 million in the same period.
In contrast, Ekovest’s real estate development, toll operations and plantations segments performed better.
Ekovest noted that the Toll Operations segment saw a 78.56% increase in revenue to RM85.65 million in 4QFY22 from RM47.97 million in 4QFY21.
The improvement is due to higher traffic volume after the easing of movement restrictions, as well as a toll compensation for 2019 amounting to RM36.27 million.
Thus, the net profit of this segment increased to RM67.41 million from RM38.73 million in 4QFY21, he added.
Meanwhile, the plantation segment recorded higher revenue of RM44.84 million and gross profit of RM10.12 million in 4QFY22, compared to RM26.86 million and RM7.43 million respectively. one year ago.
The increase in revenue and gross margin for the segment was mainly due to the increase in palm oil sales and the significant increase in the average selling price of fresh fruit bunches.
Meanwhile, sales from its durian planting, contract farming and manufacturing and trading divisions also improved during the period.
Revenue at its food and beverage (F&B) division increased to RM2.85 million in 4QFY22 from RM1.19 million a year ago, thanks to the easing of MCO restrictions, which boosted spending on consumption.
Nevertheless, the dismal quarterly result drove the group’s annual result (FY22) to a net loss of RM124.98 million, compared to a net profit of RM43.39 million a year earlier. Revenue decreased by 40.3% to RM808.6 million in FY22 from RM1.35 billion in FY21.
The board remains optimistic about achieving positive financial results as it expects the Johor Bahru-Singapore Rapid Transit System (RTS) link with a contract worth RM1.98 billion for the RTS Link railway works, contributes positively to the group’s future revenues and profits. .
The board is also confident that each of the group’s segments will contribute positively to the group’s performance in FY23.
Shares of Ekovest settled at 38.5 sen on Tuesday August 30, up half a sen or 1.32%. This values the group at RM1.04 billion.