PETALING JAYA: Wasco Bhd
’s first half of financial year 2026 (1H26) core net profit of RM25.1mil fell short of expectations, dragged down by project execution delays in its oil and gas engineering division stemming from ongoing West Asia tensions.
According to Kenanga Research, Wasco’s core profit dropped 44% year-on-year (y-o-y) as revenue shrank 34% y-o-y to reflect slower work orders and reduced industrial boiler activity in its bioenergy segment.
Sequentially, however, the research house said the core profit recovered 26% quarter-on-quarter (q-o-q), driven by an 8% revenue growth and improving oil and gas margins.
Kenanga Research expects West Asia disruptions to persist into 2H26, albeit with gradual operational easing.
Consequently, the research house cut FY26 and FY27 earnings forecasts by 24% and 22%, respectively, lowering the sum-of-parts target price to RM1.02 from RM1.32.
Despite near-term earnings headwinds, Kenanga Research has maintained an “outperform” recommendation, highlighting Wasco’s defensive yield profile and strong balance sheet cash flow.
It raised the full-year dividend projection to seven sen per share following a three sen first interim dividend, offering an attractive 9.3% yield at current price levels.
