KUALA LUMPUR (July 7): Shares in WCE Holdings Bhd, which have more than doubled in price year-to-date, hit a four-year high of 69 sen during the afternoon trading session on Friday (July 7).
The counter later pared gains to close at 67.5 sen, still up 3.5 sen or 5.47%, with 22.75 million shares traded ― slotting it among the bourse’s most active stocks on Friday.
WCE owns 80% of West Coast Expressway concessionaire West Coast Expressway Sdn Bhd (WCESB), while the remaining 20% in WCESB is held by IJM Corp Bhd ― the key contractor building the highway ― which also owns a 26.65% stake in WCE.
Meanwhile, the other substantial shareholders of WCE are Tan Sri Surin Upatkoon (26.06%) via MWE Holdings Bhd, and Tan Sri Pang Tee Chew (9.39%) via United Frontiers Holdings Ltd.
The 233km (kilometre) toll West Coast Expressway, which was initially targeted for completion back in 2020, faced a myriad of issues including underperforming contractors, funding issues, disputes over land acquisition, changes in political leadership, alignment amendments and escalating costs.
With reports of the highway slated for completion in 2024, and another four sections targeted to be opened this year, the improved visibility and expectations of profitability has piqued the interest of investors.
From trading at 30.5 sen at end-2022, the counter has swelled 121.31% year-to-date.
Particularly, over the past two weeks, WCE’s share price has climbed 27.36% to 67.5 sen, from 53 sen on June 23.
Back in February, WCE obtained its shareholders’ approval to dispose of its 40% equity interest in property developer Radiant Pillar Sdn Bhd (RPSB) in a related party deal to IJM Corp’s indirect wholly-owned unit IJM Properties Sdn Bhd, for RM494 million cash.
Thanks to the RM208 million one-off surplus recognised from the disposal, WCE swung to the black for the fourth quarter ended March 31, 2023 (4QFY2023) with a net profit of RM159.45 million, versus a net loss of RM10.95 million a year earlier.
However, due to lower expressway construction activities, revenue slumped 40.13% to RM111.2 million, as compared to RM203.8 million previously.
Prior to returning to the black in 4QFY2023, the group had posted 14 consecutive quarters in the red since its RM9.23 million net profit in 1QFY2020.
Without the RPSB disposal gain, WCE would have posted a loss before interest and tax (LBIT) of RM18.71 million, versus a profit before interest and tax (PBIT) of RM3.76 million in 4QFY2022.
As at end-March 2023, WCE’s cash pile stood at RM513.03 million, while total borrowings amounted to RM4.12 billion.