PETALING JAYA: Loss-making Mudajaya Group Bhd expects to start seeing a turnaround in its fortunes by as early as the third quarter of its current financial year ending Dec 31 as it seeks to fix its Indian venture.
The construction and engineering firm took a big hit in the fourth quarter of 2018 on a rising share of losses in an independent power producer in India. However, chairman Datuk Yusli Mohamed Yusoff said the group is close to resolving the situation.
“We’re at a stage where we expect to see a turnaround in revenue. We’re still in negotiations with lenders in India on the project but we’re close to finalisation in terms of discussions with them.
“Given that it is India, we’ve learnt not to give definitive timelines as to when we hope it can be finally resolved.
“But we’re happy that we’re moving in the right direction and we hope that this can be closed very soon,” he told StarBiz after the company’s AGM.
Group managing director and chief executive officer James Wong is hopeful that the situation would be resolved by year-end.
“We need financial restructuring with the lenders that provided us with the funding for this project. That exercise is in the advanced stage and we’re trying to conclude it by, hopefully, this year.”
Executive director Eric Lee chimed in on Mudajaya’s turnaround plan: “By the second quarter of this year, the carrying value, based on the equity accounting, would be zerorised and this has been overshadowing the performance of our local business.
“So, from the third quarter onwards, we should see our numbers turning around. But it would not be reflected in our full-year numbers because of the overwhelming impact (the Indian venture had) on our earnings in the first two quarters.”
Mudajaya posted a net loss of RM235mil in the last quarter. For the full year (FY18), its losses increased to RM396mil compared with a net loss of RM124mil reported a year earlier.
The group attributed the higher losses to its share of losses in RKM Powergen Pvt Ltd and the long overdue receivable from RKM arising from the equipment supply contracts.
Yusli said the prospects of Mudajaya’s domestic business remained bright.
“Our orderbook currently is just under RM2bil and can last us another two to three years. We’re actively looking at replenishing that orderbook,” he said.