SCB posts RM126.7 million loss

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SCB posts RM126.7 million loss

KUCHING: Sarawak Cable Bhd (SCB) has posted group net loss of about RM126.7 million for the 17-month period to May 31, 2022 (17M2022) on revenue of R

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KUCHING: Sarawak Cable Bhd (SCB) has posted group net loss of about RM126.7 million for the 17-month period to May 31, 2022 (17M2022) on revenue of RM815.9 million.

There are no comparison figures as the company has changed its financial year to May 31 from Dec 31.

Losses per share from Jan 1, 2021 to May 31, 2022 (17 months) stood at 33.82sen.

In the current quarter (two months from April 1 to May 31, 2022), SCB suffered group net loss of RM91.2 million on revenue of RM60.7 million.

During 17M2022, SCB derived RM728.2 million or 89.3 per cent of its revenue from the sales of cables and wires, and the segment incurred pre-tax loss of RM36.1 million.

“Market demand for products under this segment remains challenging but has shown improvement in consideration that all economic sectors in Malaysia were reopened in January 2022.

“The group continues to explore opportunity to increase its market share locally and overseas,” the company said in explanatory notes to its financials.

The sales of galvanised products and steel structures segment chipped in RM29.6 million or 3.6 per cent to group revenue and registered pre-tax loss of RM3.4 million.

SCB said the market demand for products under this segment has picked up and the group continues to explore opportunities to supply and sell its products especially in the Borneo Island.

The transmission lines construction segment reported revenue of RM54 million and pre-tax profit of RM5.5 million mainly due to reversal of provision for damages upon completion of a project.

“The group anticipates increased contribution from this segment in view that all movement restrictions (related to COVID-19 pandemic) were fully lifted in January 2022.

“The group’s continuous plans for the power transmission industry includes active participation in works as subcontractors and implement and strength our project management team to better manage the cost and completion timeline of on-going projects,” said SCB.

SCB said its power generation, helicopter services and corporate segment recorded revenue of RM17.9 million in 17M2022, with the income mainly came from the power generation business. The group owns a mini hydro plant in Sumatra, Indonesia, which was commissioned in fourth quarter 2021.

For 17M2022, the group recorded pre-tax loss of RM103.9 million as its operations were affected by the various movement control orders (MCOs) and recognition of loss due to assets held for sale and de-recognition of deferred tax assets.

“During the current reporting period, various MCOs were implemented due to the challenges brought by COVID-19, and this has resulted in interruption to the supply chain, thus affecting our cables and wire business. However, the impact was softened by the reversal of provision for liquidated damages for a completed project under the transmission lines construction segment.”

Commenting on prospects, SCB said: “The group’s cable and wires segment has good book orders. There is an increase in the book orders for galvanised products and steel structures segment and the power generating segment will be contributing positively with the commissioning of the hydro dam since October 2021.

“Copper price on London Metal Exchange (LME) hit record high in early May 2021. Customers may potentially defer their cable purchases if they had not factored in such high metal prices in their projects. As our cables and wires business adopts back-to-back and hedging approach, the fluctuations on LME metal prices will not have any direct impact on our profitability.”

As all economic sectors in Malaysia have reopened, the company foresees opportunities to strengthen and grow its business.
On the company’s recent private placement exercise, SCB said it has raised RM30.22 million and the money has been utilised mainly for the group’s working capital requirements.

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