Zecon returns to profitability with RM39.7 million net profit

SHAH ALAM 31 August -  Zecon Berhad has returned to profitability to register a net profit of RM39.744 million attributable to shareholders in 2020 compared to a net loss of RM20.974 million a year before. For the financial year ended 30 June 2020, the property and construction firm recorded a higher revenue of RM507.514 million compared to RM370.442 million in the comparable year previously.

In the individual fourth quarter, the Sarawak-based Group also returned to the black to chalk in a net profit of RM2.6 million compared with a net loss of RM5.006 million in the same corresponding quater a year ago. Revenue for the quarter under review however dipped to RM40.2 million from RM78.2 million in 2019.

The gross profit recorded by the Group during the quarter was mainly contributed by the Hospital Pakar Kanak-Kanak Universiti Kebangsaan Malaysia and Pan Borneo highway projects. In addition the Group's effort in carrying out rationalisation of operating expenses since the beginning of current financial year paid off.

The Hospital Pakar Kanak-Kanak project also contributed towards the significant amount under the other income of the Group, the company said in a statement. Moving forward, the Group said it will still be registering revenue from its construction projects particularly from both the Pan Borneo Highway and Hospital Pakar Kanak-Kanak project.

The Pan Borneo Highway project is currently progressing well even with the difficulties posted by the MCO and the continued RMCO. The concession period for the Hospital Pakar Kanak-Kanak project is expected to commence operationally by year-end.

"In addition, we are in the midst of finalizing our corporate exercise of the proposed renounceable rights issue of up to 576 million new irredeemable convertible preference shares and employees' share option scheme,” said Zecon in a statement today.

The proposed exercise is expected to be fully completed in October. The company said the firm continues to rake in construction revenue from the Pan Borneo Highway (Phase One) project.

In the service concession segment, the concession is executed based on the concession agreement with the Government of Malaysia and Universiti Kebangsaan Malaysia for the Hospital Pakar Kanak-Kanak in Cheras, Kuala Lumpur.
 

The company also derives revenue and profit from other operations which mainly consist activities by the Group’s asset management services. Zecon's board of directors has not declared any interim dividend in the current quarter in respect of the financial period ended 30 June 2020. 

Zecon is a name notable for engineering and construction solutions, was established in 1985 and became a public-listed company in 1997 and has successfully completed more than 38 major projects with a combined project value of more than RM 2.56 billion. - DagangNews.com