Updated Pilecon audited 4Q net loss surges to RM177.9m on provisions

KUALA LUMPUR: PILECON ENGINEERING BHD [] posts audited net loss of RM177.91 million in fourth quarter ended Dec 31, 2008 (4Q FY08) due to large provisions and write-offs.

Unaudited 4Q net loss was RM798,000 only, according to company announcement to Bursa Malaysia on Monday, Nov 2, 2009.

Pilecon said audited revenue for 4Q was 37.8 million while pretax loss was RM176.8 million and loss after tax RM178.71 million. Unaudited results showed revenue was RM378.86 million while pretax loss and net loss were RM798,000.

The variance between the audited net loss and audited net loss was a whopping 22,295% or RM177.92 million.

Pilecon said the deviation was due to goodwill written off totaling RM9.3 million for few subsidiaries not expected to generate future benefits.

Goodwill of RM8.9 million was from consolidation of Johor Coastal Development Sdn Bhd ("JCD"), a 56% owned subsidiary. It was made due to its inability to generate future income and that JCD had undertook a scheme of arrangement with its creditors pursuant to Section 176 of the Companies Act, 1965.

On provision of claims, Pilecon said RM4.3 million was provided in respect of judgment and arbitrated debts and ongoing legal cases where company views cases are weak.

There was also provision of RM37.8 million for doubtful debts. Subsequent to balance sheet date of Dec 31, 2008, further provision of doubtful debts were made due to doubtful recovery as a result of the prevailing tough economic condition as well as their inability and unsustainability to turn around in the foreseeable future.

It also wrote off bad debts amounting to RM 32.3 million which was mainly due to additional write off during the audit process.

Pilecon said provision of RM30.9 million was made in respect of debts owing by associated companies