KUALA LUMPUR (Feb 26): WCE Holdings Bhd (KL:WCEHB) said interest costs and tax expenses wiped out a surge in toll collections on the West Coast Expressway, sending the concessionaire deeper into the red.

Net loss for the three months ended Dec 31, 2024 (3QFY2025) widened to RM88.56 million from RM22.39 million in the same period a year earlier, WCE said in an exchange filing on Wednesday. During the quarter, the company booked finance cost of RM56.17 million and tax expenses of RM61.91 million.

WCE said initial net losses in the early years were expected before the company turns around — when additional sections of the expressway become operational and raise traffic volume — lifting revenue growth above that of financing cost.

The company is still profitable operationally, WCE said, noting a 94% jump in earnings before interest, taxes, depreciation and amortisation to RM23.9 million in 3QFY2025.

Toll fares collected more than doubled year-on-year to RM32.58 million in 3QFY2025, thanks to a jump in average daily traffic. Revenue, however, fell 52.6% to RM84.24 million on lower billings at its construction arm after completing three more sections of the expressway.

Construction for the final three sections is currently ongoing, WCE said.

The company said seven of 11 sections of the expressway had been completed and are now operational, covering 170km across Selangor and Perak at the end of 2024. The eighth section, linking the South Klang Valley Expressway and Shah Alam Expressway, was opened on Jan 22 this year.

The entire West Coast Expressway covers 233km of the tolled highway from Banting, Selangor to Taiping, Perak. The project is on build-operate-transfer model, with a concession period of up to 60 years effective from Dec 20, 2013.

“Looking ahead, the continued ramp-up in sectional toll revenue is expected to further improve the group’s financial performance, in terms of cash flows and operating results,” WCE said.

Once the full alignment of the expressway becomes operational, revenue growth is anticipated to outpace financing cost, “supporting a transition to sustained profitability”, the company added.

IJM Corp Bhd (KL:IJM) is WCE’s single-largest shareholder with a 26.65% stake, followed by lottery-to-insurance tycoon Tan Sri Surin Upatkoon with 26.06%. He is also Malaysia’s 19th richest man, according to Forbes’ 2024 rankings.