KUALA LUMPUR (Aug 29): Pestech International Bhd’s net loss ballooned to RM125.67 million for the fourth quarter ended June 30, 2023 (4QFY2023) from RM15.76 million a year ago, on substantial increase in operating costs, coupled with a slew of impairments.

Operating costs jumped 67% to RM249.25 million for 4QFY2023 from RM149.14 million in the previous corresponding quarter, despite revenue growing by a meagre 5.3% to RM139.04 million from RM132.11 million, according to the group’s stock exchange filing on Tuesday.

During 4QFY2023, Pestech said it booked RM17 million in impairments, of which RM13.4 million were from long overdue receivables, RM2.6 million as goodwill from acquisition of a subsidiary, and RM1 million from property, plant and equipment.

“The loss in the current quarter is also due to the unrelenting interest hikes and the threats of an approaching inflation, which had brought about impact onto the group significantly in the current quarter, compared to the preceding year’s corresponding quarter,” it said.

Going forward, Pestech said the upcoming fresh capital of RM124 million from IJM Corp Bhd’s subscription of 800 million shares, representing a 44.83% stake in the group’s enlarged capital, will be a boost financially and operationally.

“We view the collaborative benefits that would be brought about by the involvement of IJM into Pestech as a catalyst for sustenance of our organisation, and also an important inducement for further growth in the regional power infrastructure industry,” it said.

“It is thus pivotal, as the first step, for the RI (restricted issue of shares) to be carried through successfully, and subsequent to that, assimilating the expertise of both organisations to promulgate ventures into opportunities that eluded Pestech due to our own financial and operational limitations.

“As such, we are confident that with the support from our customers, suppliers, financial institutions and our impending major shareholder, we shall prevail in energising sustainable growth that would bring about long-term positive returns to the shareholders of the company,” it added.

Pestech recently made headlines after its RM742.85 million contract for the aerotrain project in KLIA was terminated by Malaysia Airports Holdings Bhd.

Pestech is hoping to salvage the job and is disputing the termination.

Shares of Pestech closed half sen or 1.8% lower at 27 sen on Tuesday, giving it a market capitalisation of RM267.9 million.