Eversendai extends its losing streak with another quarterly loss

STEEL construction firm Eversendai Corp Bhd has posted yet another quarterly loss on a lower turnover.

For the second quarter ended June 30, 2022 (2Q22), the company’s net loss widened to RM69.78 million, eight times more than the RM8.86 million posted in the same quarter last year. This dragged its first-half net loss to RM98.87 million, compared to RM12.7 million in the same period in 2021.

The deterioration in performance was mainly due to under-utilisation of the group’s fabrication facilities resulting in under-recovery of fixed costs, adjustment of contract values and margins for some projects and provision for impairment of receivables, it said in a Bursa Malaysia filing yesterday.

Eversendai posted a revenue of RM174.93 million in 2Q22, down 38% from RM282.14 million the year before. For the first half ended June 30, 2022 (1H22), it chalked a revenue of RM398.45 million, or 33% lower than RM593.52 million the year before.

The group’s orderbook value stood at RM1.93 billion, it said.

Eversendai’s core business in structural steel works segment contributed 94.2% of its total group revenue, with the Middle East region contributing the largest share at RM162 million or 40.7% of total group revenue, followed by the India region (RM121.5 million or 30.5%) and South-East Asia (RM86.8 million or 21.8%), it said in the local bourse filing.

As part of the group’s overall strategy for the recovery phase of the post-Covid-19 and its related impact, the company said it had reacted quickly, optimising its’ resources, balancing risk and liquidity while assessing opportunities for growth wherever possible.

Immediate action had been taken to address short-term liquidity challenges to ensure that the company rebounds from the effects of this global downturn, and to ensure sustainability of the group, it added.

Founded by Tan Sri AK Nathan Elumalay, the company provides turnkey structural steel works for high-rise buildings, composite structures, long-span structures, bridges, and industrial plants in Southeast Asia, India, the Middle East, and North Africa.

Eversendai stock closed yesterday unchanged at 11.5 sen. — TMR/graphics by TMR