ECONPILE Holdings Bhd is heading into its fourth quarter with earnings under pressure as surging material and fuel costs threaten to squeeze margins.
While the piling specialist has continued to replenish its order book and secure new contracts, the sharp margin deterioration seen at peer Aneka Jaringan has raised concerns over Econpile’s near-term profitability.
RHB expects Econpile’s quarter four financial year 2026 (4QFY26) core net profit to range MYR0.2-0.5 mil, compared with 4QFY25’s core earnings of MYR8 mil.
This may be mainly due to the higher prices of materials like diesel, with the Brent crude oil price reaching as high as USD118 per barrel in late April.
“Taking this into account, we project its FY26 core earnings at MYR3.7-4 mil,” said RHB.
Aneka Jaringan, a peer of ECON, has released its 3QFY26 results which cover the Mar-May 2026 period. ANEKA’s GPM dropped to 4.9% from 10.5% a year ago, on the continued escalation in material, fuel and transportation costs.
Revenue in 3QFY26, in fact, surged by 38% year-on-year (YoY) while gross profit plunged by 36% YoY, as a result of the increased prices of materials.
Based on this peer’s performance, gross profit margin (GPM) compression in Econpile’s upcoming 4QFY26 results would be highly likely. The company’s GPM back in 4QFY25 was 18.6%.
Based on our estimates, Econpile’s latest outstanding orderbook is expected to be at MYR570 mil after taking into account the latest MYR39.5 mil job win for a commercial development in July, vs MYR498 mil as at end-4QFY25.
Its FY26 new job wins stood at MYR404 mil, slightly above its job target of MYR400 mil for FY26, which include piling works for condominium and industrial buildings.
The group’s tenderbook is valued at MYR1 bil, and comprises private and public sector jobs.
Looking ahead, new contract wins and bids are likely to be priced at better margins compared to ones secured prior to the period of diesel cost spikes, which were driven by the Middle East conflict.
Aside from that, we understand that, generally, certain projects have the main contractor being the one procuring certain materials such as concrete, which should help alleviate the cost pressures.
Econpile’s leading track record in infrastructure jobs such as Light Rail Transit 3, Mass Rapid Transit 2, and Penang Light Rail Transit may enable the group to secure other infrastructure projects such as the Johor Bahru Autonomous Rapid Transit System.
RHB points out prolonged periods of high material costs as the key downside risk.—Aug 10, 2026
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