KUCHING: Quality Concrete Holdings Bhd has delivered dismal financial results with the group slipping into the red of RM6.69 million in the first nine months to Oct 31, 2023 (9M2023) from net profit of RM4.14 million in 9M2022.
Group revenue fell to RM136.3 million from RM161.9 million previously.
The company reported losses per share of 11.55 sen from earnings per share of 7.15 sen.
In the current financial period, Quality Concrete derived the bulk of its revenue or RM92.1 million from the property development & construction segment (9M2022: RM109.1 million). The manufacturing segment also reported lower turnover of RM43.4 million (RM51.5 million) and the trading segment chipped in lower sales of RM903,000 (RM1.3 million).
The quarry operation as well as investment & management services segments have not recorded any revenue in both years.
Quality Concrete said the group revenue in 9M2023 fell by RM25.5 million or RM15.8 million compared to a year ago, with the property development & construction segment reporting lower revenue of RM17 million.
“The construction division has experienced drop in revenue in tandem with the completion of two projects in the last financial year,” the company said in notes to its financial results.
Quality Concrete said the drop of RM8 million in the revenue of the manufacturing segment in 9M2023 was due mainly to lower sales recorded by both the ready mixed division and pipes division. The two divisions registered lower revenue of RM5.4 million and RM2.7 million respectively in the current financial period because demand for concrete products from existing customers was slower in the current period under review.
Meanwhile, the pipe products division also seen weaker demand owing to fewer water infrastructure projects being rolled out by the government.
In 3Q2023, Quality Concrete incurred group net loss of RM61,000 (3Q2022: +RM2.02 million) as revenue shrank to RM52.2 million (RM63.9 million). The property development & construction segment saw its revenue dropped to RM38.7 million (RM43.7 million) while the manufacturing segment revenue fell to RM14.1 million (RM20.1 million).
In 9M2023, Quality Concrete posted group pre-tax loss of RM6.7 million (9M2022: +RM7.1 million), with the property development & construction segment reported pre-tax loss of RM2.3 million (+RM9.1 million).
“The weaker results were due to the resurfacing works carried out in the 1st and 2nd quarter by the road maintenance division at the request of our client while usually the work is spread across the year.
“The monthly maintenance claim while remaining the same as the contract income is being paid based on a fixed rate per kilometre of road maintained per month. Therefore, there is a mismatch between revenue and cost for the quarter under review. As a result, the road maintenance division recorded pre-tax profit of RM1.9 million in the current period as compared to pre-tax profit of RM6.7 million recorded in the corresponding quarter of last year. Therefore, we expect the results will be improved in the next quarter,” explained the company.
For the construction division, the company said its registered pre-tax loss of RM4 million (+RM2 million) was due to lower revenue from project in hand and a one-off cost of RM1 million incurred for securing additional financing.
The manufacturing segment also turned in weaker results of pre-tax loss of RM3.7 million (-RM1.6 million) in tandem with lower turnover in the current financial period.
