KUCHING: Despite its margin profile being viewed as attractive, Vivocom Intl Holdings Bhd’s (Vivocom) financial year 2017 (FY17) results came in below expectations due to lower recognition from projects with slower progress billings.

As per the group’s filing on Bursa Malaysia,  Vivocom’s loss attributable to equity holders of the company amounted to RM14.6 million, down from RM53.9 million in the previous year.

Vivocom’s FY17 earnings came in below with the research arm of MIDF Amanah Investment Bank Bhd’s (MIDF Research) estimates.

“The striking deviation was due to lower revenue recognition from projects due to slower progress billings,” MIDF Research said.

“We believe that the slower progress billings cycle has afflicted Vivocom due to a heightened risk/reward sentiment for property mart and mixed development.”

However, MIDF Research finetuned its assumptions as the research arm believed that FY ended 2018 (FYE18) could be a better year for Vivocom to recognise the group’s billings for its orderbook level but the progress will be even slower compared to what it has reported before.

The research arm thus trimmed its earnings forecast for FYE18 by 40 per cent from RM79.9 million to RM46.8 million to reflect slower billings recognition.

“To balance our view, Vivocom margin profile is attractive – illustrating that the management are capable to defend their pricing albeit grim sector condition.

“Over the past seven quarters, Vivocom’s operating margin and net margin has upped its KLCon Index peers.”