Malaysia’s WZ Satu Bhd reports fall in Q1 FY2018 profits due to bauxite mining business loss

The sudden halt in Malaysia’s bauxite mining growth has put many bauxite miners in the South-East Asian mineral-rich country in financial lows.  WZ Satu Bhd, for example, reported a sharp decline its net profit for the first quarter ended November 30, 2017.

The Main Market-listed diversified company with business interests in civil engineering and construction, oil and gas, bauxite mining, and manufacturing said Tuesday that its net profit for Q1 of the current financial year stood at 497,000 ringgit (US$127,490), down from 8.50 million ringgit in the previous year. The profit was down mainly due to weaker results in the mining segment, it stated.

"There was a share of loss in mining associates' results of 0.8 million ringgit compared to a share of profits of 2.7 million ringgit in the comparative quarter," WZ Satu said in a statement.

However, revenue increased by 6.13 per cent year-on-year to 138.16 million ringgit in Q1 FY 2018.

In a filing with Bursa Malaysia on October 5, 2017, WZ Satu had cautioned investors of an expected loss of 1.2 million ringgit in Q4 ended August 31. The losses registered then were also due to businesses lost in its bauxite mining segment.

Mining operations being WZ Satu’s one of the key business segments, bauxite mining moratorium dealt quite a severe blow to its financials.

Nevertheless, the diversified company remains positive about lifting of the ban in due time that would help revive its mining segment in the forthcoming quarters.