A relatively lesser-known construction company, Aneka Jaringan Holdings Berhad (ANEKA, 0226), recently announced impressive quarterly results, as the company successfully turned its losses into profits. Before delving into these results, let's take a moment to understand Aneka Jaringan.

According to the company's official website, ANEKA was founded in 2001 and specializes in basement and foundation construction. In essence, the company's primary role involves piling, which fortifies the foundation of buildings. For the record, piling is a fundamental and early-stage process in construction, so making it a relatively secure financial endeavor.

Notably, ANEKA boasts over 20 years of experience and expertise in the industry, having been involved in numerous large-scale construction projects such as MRT 1, MRT 2, LRT 3 underground tunnels, Merdeka 118, and ECRL, among others.

Currently, the company operates in both Malaysia and Indonesia. According to its 2022 annual report, the Malaysian market accounted for approximately 85.25% of the total revenue for the fiscal year 2022, with Indonesia making up the remaining 14.75%. By the way, ANEKA was listed on the ACE Market of Bursa Malaysia Securities on October 20, 2020.

Revenue Comparison (YoY +1.11%, QoQ +24.89%)

As of the fourth quarter ending on August 31, the company's revenue stood at approximately RM51.52 million, representing a year-on-year increase of around 1.11%. Furthermore, when compared to the previous quarter, the revenue saw a significant uptick of about RM10.27 million, translating to a growth of nearly 24.89%. Unfortunately, the management did not provide an explanation for this surge. In my personal opinion, this growth can be attributed to the projects ANEKA had secured in June of this year, with a contract value of RM168.00 million.

It's also worth mentioning that ANEKA achieved a historical high in revenue for the full fiscal year 2023, with a total revenue of about RM188.58 million, representing an increase of approximately 9.58% compared to the RM172.08 million in the fiscal year 2022.

Net Profit Comparison (YoY +104.84%, QoQ +115.84%)

In contrast to the net losses incurred in the same period of the previous year and the preceding quarter, the company achieved a net profit of about RM0.58 million this quarter, mainly attributed to reduced impairment losses.

According to the quarterly report, the impairment losses for this quarter amounted to approximately RM2.46 million, marking a significant reduction of 78.01% compared to the RM11.19 million impairment losses recorded in the same period of the previous year. Out of the RM2.46 million in impairment losses, around RM2.37 million stemmed from differences between the final claims and settlements of certain projects of Aneka Jaringan Sdn Bhd, while the remaining RM0.09 million came from long-overdue receivables of the Indonesian subsidiary, PT Aneka Jaringan Indonesia.

Despite this positive development, ANEKA remained in a loss-making position for the entire fiscal year 2023. However, the net loss for this quarter decreased by approximately 61.06% compared to the net loss of RM32.44 million in the fiscal year 2022, standing at around RM12.63 million.

Outlook

In the fourth quarter of the fiscal year 2023, ANEKA successfully secured new construction projects with a total contract value of RM232.57 million. Consequently, for the entire fiscal year 2023, the company secured contracts with a total value of approximately RM346.09 million, with an outstanding order book worth about RM295.80 million.

Furthermore, despite concerns about fluctuations in construction material prices, the management remains cautiously optimistic about the company's future financial performance for the fiscal year 2024, driven by a robust order book.

So, dear readers, what are your thoughts on ANEKA, the construction company with a remarkable turnaround?

———————————————————————————————————————————————————

Disclaimer: The above is purely for educational purposes and reflects personal opinions. It does not constitute any buying or selling recommendations.

If you are interested in opening a CGS-CIMB trading account, please sign up using the following link:

https://forms.gle/kZVCyDxUurxChMcg9

———————————————————————————————————————————————————————————