Pintaras Jaya Bhd (Pintaras Jaya) reported a net loss of RM5.1 million for the fourth quarter of fiscal year 2024 (4QFY24), contributing to a full-year net loss of RM5 million. This result is a significant deviation from the anticipated net profit of RM1.5 million for FY24, primarily due to continued losses in its Malaysian construction operations. The company also faced reduced profits from its Singapore operations.

Analysts have responded to the shortfall by lowering their profit forecasts for FY25 and FY26 by RM5 million each, while introducing estimates for FY27. The target price (TP) has been adjusted to RM1.64, down by 6 sen, based on an unchanged price-to-book ratio of 0.7x, reflecting a -1.5 standard deviation from the long-term mean and rolling forward FY25 estimates. Despite the negative outlook, the HOLD rating remains unchanged.

The loss in 4QFY24 and the full fiscal year stemmed from ongoing issues in Malaysian construction, where losses before tax widened to RM20 million from RM5 million in FY23. This decline is attributed to lower activity levels in Malaysia and reduced rates for newly secured contracts in Singapore. Additionally, a RM15.4 million provision for liquidated damages for late project deliveries in Malaysia exacerbated the financial strain. For the fiscal year, the construction losses in Malaysia exceeded the profits generated from Singapore operations.

Looking ahead, Pintaras Jaya is more optimistic about its prospects for 2025. Management has noted excess capacity in Malaysia relative to demand for piling services, leading to generally depressed tender prices. To address this, the company has temporarily redirected some capacity to Singapore, where construction activities have increased in the current fiscal year. Management anticipates an improvement in Malaysian operations by 2025 and is hopeful for a better performance based on current tender activities.

Source: Maybank
Title: Shortfall