KUALA LUMPUR (Aug 20): Highway construction company WCE Holdings Bhd, in which IJM Corp Bhd holds a 30.7% stake, has remained loss making for eight consecutive financial quarters.  

MWE Holdings Bhd is the second largest shareholder holding a 29.7% stake.

The construction outfit posted a narrower net loss of RM27.8 million in its first financial quarter ended June 30, 2021 (1QFY22) compared with RM30.89 million a year ago, despite sharply higher revenue.

Quarterly revenue ballooned more than four times to RM181.68 million from RM44.53 million a year ago, due to higher construction revenue for its toll concession segment (West Coast Expressway project) totaling RM175.5 million compared with RM44.5 million in 1QFY21.

In addition, WCE recognised construction revenue of RM6.2 million in respect of the construction works for the Seri Langat under construction segment, as opposed to zero revenue a year ago amid the nationwide MCO 1.0 which was implemented to stem the Covid-19 pandemic.

The group said the smaller loss was due to higher share of profits from associates of RM5 million in the quarter under review versus loss of RM300,000 in the preceding year's quarter due to completion of certain phase of the Bandar Rimbayu development and temporary halt in construction activities due to implementation of Movement Control Order 1.0 (MCO 1.0) last year.

WCE's project involves the development of a 233km tolled highway (West Coast Expressway) from Banting, Selangor to Taiping, Perak and it is being built on a build-operate-transfer basis, with a concession period of up to maximum of 60 years.

WCE expects to incur losses in the early years of its toll operations due to the cessation of capitalisation of interest expenses for completed sections and the non-cash expenditure in respect of the amortisation of infrastructure development expenditure.

Nevertheless, it said the commencement of toll operations of the West Coast Expressway is expected to improve its future financial performance in terms of cash flow and is expected to provide the group a stable recurrent income over the concession period.

On property development, it said the property market will remain challenging, mainly impacted by issues such as price affordability, overhang of highly priced properties, rising costs of living, tight financing and economic impact of Covid-19.

WCE share price closed up  0.5 sen or 1.28% at 39.5 sen, for a market capitalisation of RM1.02 billion.