KUALA LUMPUR: ZELAN BHD [] sank deeper into the red with losses of RM35.1 million, surpassing its revenue of RM30.70 million in the second quarter ended Sept 30, 2010 following cost overruns at its overseas projects.

It said on Friday, Nov 19 the 2Q net loss was worse than the net loss of RM13.85 million a year ago. Revenue fell sharply to only RM30.70 million, down 91.3% from RM351.79 million. Loss per share was 6.23 sen compared with 2.45 sen.

"This is due to lower contributions from the overseas projects of the engineering and CONSTRUCTION [] business unit," it said.

Explaining the 2Q net loss it said it was mainly due to higher losses incurred by the existing overseas projects of the engineering and construction business unit.

"These projects encountered cost overrun due to material price escalation, under-budgeted items and additional costs arising from work delays offset by gain on sale of investments," it said.

For the six months, net loss was RM34.23 million on the back of RM128.81 million compared with net loss of RM9.54 million and revenue of RM724.31 million in the previous corresponding period.

As of Sept 30, the group's current liabilities exceeded their current assets by RM72.24 million.

Zelan had partially disposed off its available-for-sale investment and received gross proceeds of about RM48.3 million between October and November 2010.

The proceeds from the disposal were used to repay borrowings and for working capital.