KUALA LUMPUR: WCT Holdings Bhd's managed to trim its core net losses in financial year 2021 by 79 per cent year-on-year (Y-o-Y) to RM48.7 million as its engineering and construction division was able to hit higher operating capacity towards the second half (2H) of 2021, MIDF Research said.
The firm said the results were above its expectations by 9.8 per cent but below consensus, which had expected WCT to have a positive core earnings.
MIDF Research said the engineering and construction segment's revenue rose 2.4 per cent Y-o-Y to RM1.28 billion.
This accounted for 73.2 per cent of WCT's total revenue for financial year 2021 (FY21), underpinned by its strong orderbook, recorded at about RM5 billion previously.
MIDF Research said WCT would continue to focus on project execution while pursuing new jobs to replenish its order book.
"We remain sanguine on the group's earnings outlook, predicating on its strong outstanding order book, which provides earnings visibility of up to three years and also its prompt resumption of work operations.
"Meanwhile, higher property sales are also likely with the current accommodative environment, upcoming launches of products at strategic locations especially in the central prime region and a possible extension of the Home Ownership Campaigns.
"We think that the group remains a strong contender and major beneficiary for the continuation of mega public infra projects, premised on the group's strong track record and vast experience in railway, highway and building projects," the firm said in a report today.
MIDF Research has maintained WCT's top line estimates for FY22 at RM2 billion and core earnings at RM80 million.
"Moving forward, we expect WCT's construction and property business activities to continue to regain pace and recovery momentum as economic activities gradually return to normalcy," it said.
The firm has maintained its "Buy" call on WCT with an unchanged target price of 80 sen.