WIDAD Group Bhd posted lower first-quarter results following the completion of two projects, as well as the slowdown due to the Movement Control Order (MCO) implemented to contain the spread of Covid-19.
Widad’s net profit dropped 65% to RM2.14 mil for the first quarter ended March 31 compared to RM6.21 mil for the same quarter last year. Revenue for the same quarter came in lower as well, at RM24.62 mil from RM45.35 mil last year.
The group attributed the lower revenue and profit to the completion of the Makmal Sains project from the construction segment, which was concluded in 1Q19 and contributed RM1.5 mil.
“We faced slower progress of work due to the rescheduling of all projects that resulted in an extension of time, and partly due to the MCO in response to the Covid-19 pandemic at the end of the first quarter,” said Widad in a Bursa filing.
In its integrated facilities management (IFM) segment, the group also marked the completion of the JB Sentral contract, which ended on March 31, 2019, and contributed RM10 mil during that quarter.
The group noted that the outlook for 2020 is challenging and uncertain, “as the full impact of the Covid-19 pandemic has not been ascertained,” leading to a cautiously optimistic view of its performance this year.
Widad also shared that its construction segment still has a remaining contract value of RM506 mil, which it is confident of growing further, and that the introduction of economic stimulus packages by the government should see the sector rebound in the second half of 2020.
In the IFM segment, Widad noted that the sector is a “developing, yet highly competitive” sector, due to the increasing outsourcing culture and expansion of construction projects. The industry had also undergone regulatory enhancements in 2019 to align itself to international standards.
Widad’s IFM segment still has a remaining orderbook of RM238 mil, according to the group, which is to be performed until June 2022.
At the noon close, Widad’s shares were at a static 50 sen, with 3.6 million shares changing hands. – June 11, 2020
