Gunung Capital banking on NS contract extension

PETALING JAYA: Gunung Capital Bhd, which reported a net loss of RM2.4 million in the third quarter ended Sept 30, 2017, is optimistic a two-year contract extension to the existing National Service agreement will be secured by end of the year.
The company made a net profit of RM79,000 in the quarter ended Sept 30, 2016.
In a filing with Bursa Malaysia today, the group said its operating profit from the transportation segment for the quarter was substantially lower than in the previous year, with higher operating costs due to full utilisation of the group’s fleet of vehicles and outsourcing vehicles from third party coach operators to support service-contract requirements.
Revenue for the quarter was slightly higher by 1.7% to RM10.7 million, compared with RM10.52 million in the same period last year, underpinned by contract revenues from the National Service Programme and the Defence Ministry contract to ferry school children.
On its prospects, the group said management will continue efforts and investment to secure additional contracts in chartering land-based transportation assets and specialty vehicles and improve operating efficiencies, as its main strategy for the transportation division.
“The management is optimistic that by end FY2017 a contract extension for the existing National Service Program service- contract for an additional two years, comprising of FY2018 and FY2019, will be secured. This will underpin the group’s prospective contract-revenues,” it added.
For the nine months period, its net profit widened to RM3.9 million, from RM25,000 a year ago, while revenue grew slightly by 2.3% to RM31.2 million, from RM30.5 million previously.
The group slipped 2.53% to 38.5 sen today with some 20,000 shares traded.