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Hit by MCO, WZ Satu sinks deeper into the red

TheEdge Wed, Jul 22, 2020 09:46pm - 3 months ago

KUALA LUMPUR (July 22): Hit by Movement Control Order (MCO), WZ Satu Bhd's net loss widened to RM10.8 million for the third quarter ended May 31, 2020 (3QFY20), from RM7.33 million a year ago. This is the group's ninth straight quarter of losses.

Revenue plunged 82.14% to RM22.5 million from RM126.02 million on lower revenue contribution from all business segments, including civil engineering and construction, oil and gas, and manufacturing.

In a filing with Bursa Malaysia, WZ Satu said its operations were negatively impacted by the MCO and the Conditional Movement Condition Order imposed by the government to curb the spread of the Covid-19 pandemic.

The stop-work orders for all business segments and lower productivity resulted in lower billings and revenues, it said.

For the cumulative nine months ended May 31, 2020, WZ Satu said its net loss narrowed to RM28.93 million from RM36.17 million in the previous corresponding period, with revenue dropping 44.58% to RM173,79 million from RM313.58 million.

Going forward, the group said its current order book of RM729 million will ensure it is kept busy during the current and next financial year.

However, the uncertainty on the commencement date of construction projects may affect the results of the group, it said.

"Due to the challenging business environment, the bauxite mining has not resumed operations to date. However, the group is exploring other mining opportunities," it added.

WZ Satu said that in view of the challenging times, the group is continuing with its cost optimisation exercise to enhance operational efficiency, including rightsizing the workforce and rationalisation of resources throughout the group.

Shares in WZ Satu closed unchanged at 21 sen, for a market value of RM107.45 million. Some 2.16 million shares were traded. WZ's stock price has gained almost four times from its recent low of six sen on March 19, a day after the MCO was imposed.

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