Econpile Holdings Bhd has reported disappointing earnings for the fourth quarter of FY6/24, falling short of expectations due to delays in site possession and ongoing issues with low-margin legacy projects. The company's core net loss for 4QFY24 reached RM8 million, contributing to a total core net loss of RM25 million for the fiscal year. This result was worse than anticipated, with both internal projections and Bloomberg consensus estimating a RM7 million and RM10 million loss, respectively. A provision of RM4.5 million was made for a legacy project in 4QFY24, reflecting the financial strain from a client in receivership.

Despite these challenges, analysts remain optimistic about Econpile's future performance. The recommendation has been reiterated as ADD, with a target price (TP) of RM0.61, based on a 0.5x CY24F price/earnings-to-growth (PEG) ratio. This valuation suggests a 19.1x CY25F price-to-earnings (P/E) ratio.

Econpile's 4QFY24 revenue fell by 14% year-on-year to RM88 million, driven down by site possession delays. However, the company saw a positive turn in its gross profit, which increased to RM5 million from RM3.6 million in the previous quarter. The company is now focusing on conserving capacity for higher-margin projects, expecting improved earnings in FY25F and FY26F. The tender book stands at RM1 billion, predominantly comprising property projects with higher margins compared to infrastructure projects. Data centre tenders make up 5% of the tender book. With rig utilisation at around 50%, Econpile's strategy aims to leverage the influx of new projects to potentially increase pricing by approximately 15%.

The company's order book as of June 2024 totals RM409 million, including only one remaining legacy project—the Pavilion Damansara Heights Phase 2 podium works—with an outstanding balance of RM20 million, expected to be completed by December 2024. While no official target for new wins in FY25F has been set, Econpile aims to match FY24's order intake of RM432 million.