Results Highlights

• Econpile’s 3QFY20 net profit slumped 93.9% Y.o.Y to RM1.3 mln, dragged down by the slower execution of orderbook amid the shorter duration of working period in the quarter. Revenue for the quarter slipped 28.2% Y.o.Y to RM99.3 mln.

• For 9MFY20, cumulative net profit surged 704.0% Y.o.Y to RM18.8 mln. Revenue for the period, however, declined 23.5% Y.o.Y to RM372.4 mln. The reported earnings came below our expectation, amounting to 44.4% of our previous estimated net profit of RM42.4 mln for the year. The reported revenue also came below our expectations, amounting to 65.4% of our previous full-year forecast of RM569.7 mln. The variance is mainly due slower execution of orderbook following the implementation fo Movement Control Order (MCO).

• In 9MFY20, piling and foundation works for property projects remain as the largest contributor to the group’s revenue, representing 71.7% or RM267.0 mln of total revenue, with the remainder RM105.4 mln (28.3%) derived from piling and foundation works for infrastructure projects.

• In 3QFY20, Econpile continues to maintain a healthy balance sheet with a low net gearing of 0.1x (unchanged from 0.1x recorded in 2QFY20). No dividend was declared as the group declares dividend at the final quarter of the financial year end.

Source: Mplus Research - 29 May 2020