The company's shares dropped more than 15%, leading to intra-day short selling suspension until tomorrow morning. Revenue for the quarter fell 37.27% to RM451.24 million from RM719.29 million on lower contributions from its energy services and bioenergy services segments.
PETALING JAYA: Wasco Bhd shares plummeted today after the disruptions caused by the Middle East conflict decimated its first quarter earnings. Its shares dropped as much as 20% or 21.5 sen to 88.5 sen after the mid-day break, valuing the oil and gas services provider at RM689 million.
A total of 15.5 million shares were traded at the time of writing. As the shares fell more than 15%, intra-day short selling of the stock was suspended until tomorrow morning. Wasco’s net profit for the first quarter ended March 31 plummeted 68.8% to RM11.01 million from RM35.44 million a year ago as the Iran war disrupted supply chains and delayed execution of awarded projects within its energy services segment.
Revenue for Q1 fell 37.27% to RM451.24 million from RM719.29 million on lower contributions from its energy services and bioenergy services segments, according to its bourse filing yesterday. No dividend was declared for the quarter. As at March 31, Wasco’s secured order book stood at RM2.6 billion, of which 57% is related to energy transition and green energy projects.
The latest quarter result was Wasco’s worst quarterly earnings performance since Q4 FY2021, when it posted a net loss of RM112.08 million. The underwhelming performance prompted several research houses to cut their target prices for the stock. The average TP now stands at RM1.31 from RM1.39 previously, implying a potential upside of about 47% from the current price.
Hong Leong Investment Bank has slashed its FY2026 and FY2027 earnings forecasts for Wasco by 43% and 22%, respectively, to reflect the weaker-than-expected performance of its energy services division. However, it maintained its “buy” recommendation but with a lower TP of RM1.33 from RM1.49 previously. Maybank Investment Bank Bhd downgraded Wasco to “hold” from “buy”, citing lingering operational risks tied to its Middle East projects.
The bank said the group could continue facing supply chain disruptions that may affect procurement activities, while project delays could lead to cost overruns as fixed costs continue to be recognised despite extended delivery timelines. Formerly known as Wah Seong Corp Bhd, Wasco operates in over 14 countries, providing services and products to the oil and gas, petrochemical, and agro-industrial sectors.
The company was established in the late 1990s by the Tan family, which also founded major property developers IGB Bhd and Tan & Tan Developments Bhd. Wasco’s non-executive chairman is Robert Tan, the son of the company founder, the late Tan Kim Yeow. Robert has a 1.5% direct stake in the company, and a deemed interest of 41.2% via several of the Tan family investment vehicles, as of March this year.
Wasco Bhd Shares Plunged Middle East Conflict Earnings First Quarter Decimated Valuation RM689 Million 15.5 Million Shares Traders Short Selling Suspension Iran War Supply Chains Project Delays Cost Overruns Fixed Costs Delivery Timelines 14 Countries Oil And Gas Petrochemical Agro-Industrial Established Late 1990S Robert Tan Robert Tan Family IGB Bhd & Tan & Tan Developments
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