WZ Satu Bhd attributes Q4 losses to cost overrun and impairment in bauxite mining business

WZ Satu Bhd has reported results for the fourth quarter ended Aug 31 and blamed overrunning costs at two big projects and a huge damage incurred in the group’s mining business due to mining ban in Malaysia for the losses made in this quarter.

WZ Satu Bhd which started as WZ Steel Berhad and assumed the present name on 30 October 2013, slowly transformed itself into a diversified group with multiple revenue streams. The Group is now diversified into Oil and Gas Industry, Civil Engineering and Construction and Mining. The company has ventured into bauxite mining in Pahang via  its associated companies i.e. SE Satu Sdn Bhd and SE Satu Pelangi Sdn Bhd. 

For the fourth quarter ended Aug 31, WZ Satu posted a net loss of RM77.6mil and revenue of RM116.8mil. The report submitted at Bursa Malaysia on Tuesday says that it had incurred losses on projects at the refinery and petrochemical integrated development (Rapid) in Pengerang, Johor and section 9 of the West Coast Expressway in Perak.

The report says their earnings were negatively affected by the business loss caused due to mining ban in Malaysia. The company however, expects to get back to profits with the lifting of bauxite mining ban at the end of this year.

“Should the bauxite mining moratorium and export ban be lifted by the government after the end of the current moratorium on Dec 31, the group expects a write-back of these impairments,” the report said.

WZ Satu also added that it currently has an order booking of RM873 million and this will keep the group busy for the next financial year. However, the company is concerned about the uncertainty on commencement date of a project affecting the results of the group.