Sarawak Cable Bhd on Wednesday reported a net loss of RM35.82 million for the second quarter ended Nov 30, 2023 (2QFY2024), its seventh straight quarterly loss, as all segments saw reduced production amid a standstill in credit and financing lines. The loss was three times higher than the RM11.74 million net loss reported a year earlier.

KUALA LUMPUR (Jan 24): Sarawak Cable Bhd reported its seventh straight quarterly loss on Wednesday as all its business segments saw reduced production amid a standstill in credit and financing lines.

The group saw a net loss of RM35.82 million for the second quarter ended Nov 30, 2023 (2QFY2024), three times higher than the RM11.74 million net loss reported a year earlier.

Loss per share swelled to 8.98 sen, from 2.94 sen in 2QFY2023, the Practice Note 17 (PN 17) group’s bourse filing showed.

Quarterly revenue shrank 26.46% to RM107.46 million, from RM146.12 million previously.

For the first half of FY2024, net loss ballooned to RM48.54 million, from RM12.28 million for the same period of FY2023, as revenue dropped 38.68% to RM199.52 million from RM352.4 million.

The cables and wires business segment, which contributed 84.6% or RM168.9 million of the group’s total revenue in 1HFY2024, posted a loss before tax of RM12.7 million.

Sarawak Cable said that following the rejection of its restructuring programme, the group is negotiating with its creditors on a new restructuring.

“While this is in progress, our credit and financing lines are at a standstill.

“Therefore, we are currently operating under a lower capacity using all internal resources in the group. This has resulted in a reduced production and lower revenue recorded.

"Since the production has reduced, this has led to a higher unabsorbed overheads, resulting in a segment loss for the reporting period,” it added.

However, Sarawak Cable said market demand for products under this segment remains strong and the group continues to have good book orders in hand.

Similarly, its sales of galvanised products and steel structures also recorded a loss before tax of RM1.2 million, while transmission lines construction also posted a loss before tax of 27.2 million.

On prospects, the group is confident that with this restructuring in place, its financial performance will improve.

The group was classified as a PN17 company in September 2022 after its external auditor flagged uncertainty on the company as a going concern. In the last one year, Sarawak Cable has embarked on measures to beef up its balance sheet by divesting its non-cable manufacturing businesses.

Last month, the Sarawak-based manufacturer said that it had found white knight Serendib Capital Ltd to undertake a “resuscitation exercise”, which involves RM250 million to pare down its debts and recapitalise the company to “to cater to growing customer demand for infrastructure grid development and high-voltage cables”. However, it did not say if the RM250 million will be given as a loan or an equity injection.

Sarawak Cable's share price closed down half a sen or 1.96% at 25 sen, bringing the group a market capitalisation of RM100 million. The stock has fallen over 38% year-to-date.