Pintaras Jaya to feel the pinch of a tough operating environment

PETALING JAYA: Piling and foundation specialist Pintaras Jaya Bhd’s financial year 2024 (FY24) earnings are expected to be impacted amid the tough operating environment.

To this end, MIDF Research in a research report said: “We have slashed our FY24 estimated earnings by 45% during the previous quarterly announcement, in light of the weaker than expected performance and we are keeping to that figure for now.

“The FY24 has been a tough operating year for Pintaras Jaya, due to the weak margins that it has to take on and the liquidated damages for project delays.

“We reiterate our view that it is crucial for the group to continue replenishing jobs, due to the specialised nature of its earthworks and piling business, where contracts usually have shorter time frames.

“We maintain our ‘neutral’ recommendation.

“Rerating catalysts include stronger than expected job wins,” the research house added.

The company has an outstanding order book of about RM316mil, which is sufficient for it to navigate through the remaining months of its FY24 ending June.

Management is actively tendering for projects, with a tender book of around RM3bil, comprising residential, industrial and infrastructure developments.

Management is also expecting stronger prospects from Singapore, with the rising demand for bored piling jobs, MIDF Research noted.

Pintaras Jaya posted a core net profit of RM7.3mil in the third quarter of financial year 2024, while its cumulative nine months core net profit rose 82.5% year-on-year to RM3.5mil, on the back of a stronger manufacturing division that cushioned the losses from the construction segment.

The results were below the brokerage’s expectations at 39.8% of full-year estimates but within consensus at 71.9%.

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