KUALA LUMPUR (Aug 18): Highway concessionaire WCE Holdings Bhd (KL:WCEHB) saw double-digit growth in toll revenue for the first quarter of its financial year 2027, keeping operational earnings before interest, taxes, depreciation and amortisation (Ebitda) positive, even as financing costs kept its bottom line in the red.

The group posted a net loss of RM24.5 million for the first quarter ended June 30, 2026 (1QFY2027), little changed from the RM25.33 million recorded in the corresponding quarter a year ago, its bourse filing showed.

The group's core toll collection revenue rose 11.2% to RM46.74 million from RM42.02 million, though total revenue for the quarter saw a sharp 64.2% drop to RM140.8 million from RM393.85 million due to lower construction activities, as six out of 10 rest and service areas along its West Coast Expressway have been completed.

The concessionaire generated Ebitda of RM31.7 million for 1QFY2027 compared to RM33.40 million for 1QFY2026, which the group noted reflects its continued ability to generate positive operating performance.

Profitability was weighed down by finance costs of RM59.34 million, which exceeded total toll revenue by RM12.60 million, as borrowing costs for completed highway stretches are now charged directly to the profit or loss statement under accounting rules, rather than capitalised as part of infrastructure development expenditure.

“The group is expected to incur losses in the early years of toll operations due to the cessation of capitalisation of interest expenses for completed sections,” WCE noted.

Total group borrowings stood at RM5.15 billion as of end-June, 2026.

To date, eight of the 11 sections spanning 180km of the 233km build-operate-transfer highway across Selangor and Perak are operational. The entire Perak alignment (120km) has been completed.

Construction is ongoing for Section 3 (Kesas-Federal Highway Route 2) and Section 7 (Assam Jawa-Tanjong Karang), while the completed Section 4 will open concurrently with Section 3, it said.

The full alignment is slated for completion in early 2027, which WCE expects will drive revenue growth beyond financing costs, enabling a transition to sustained profitability.

WCE’s share price closed three sen or 4.32% higher at 72.5 sen on Tuesday, giving the group a market capitalisation of RM2.39 billion.