PETALING JAYA (May 1) — Ahmad Zaki Resources Bhd (AZRB) has fallen into the red for its 18-month financial period ended Dec 31, 2025, posting a loss before tax of RM49.7 million compared with a strong RM132.4 million profit a year earlier. The sharp reversal highlights how heavily the group had relied on non-recurring gains previously, alongside mounting finance costs tied to its infrastructure investments.
The key drag on earnings came from the absence of a one-off gain from a plantation disposal recorded in the prior year. At the same time, finance costs surged to RM111.1 million, largely linked to borrowings for the East Klang Valley Expressway (EKVE) concession — a long-gestation infrastructure project that is yet to fully stabilise in terms of cash flow contribution.
On a per-share basis, the group recorded a loss of 11.21 sen, compared with earnings of 14.12 sen previously. Shareholders’ funds also declined significantly to RM121.9 million from RM199.5 million, reflecting the impact of accumulated losses and ongoing financial obligations.
Despite the earnings setback, AZRB’s top line showed notable growth. Revenue more than doubled to RM1.046 billion from RM495.5 million, driven partly by the extended 18-month reporting period and stronger contributions from its engineering and construction (E&C) segment. The division remains the group’s operational backbone, supported by an order book of RM1.1 billion, including a RM430 million contract secured from the Public Works Department (JKR) earlier this year.
Operationally, the group marked a major milestone with the opening of Section 1 of the EKVE — stretching from Sungai Long to Ampang — on Aug 30, 2025. Toll operations began on Oct 25, providing an initial revenue stream from the concession. The remaining Section 2 is scheduled for completion by end-2026, which is expected to further enhance traffic flow and long-term earnings visibility.
However, concerns remain over the group’s financial health. Auditors have flagged a material uncertainty regarding AZRB’s ability to continue as a going concern, citing a significant liquidity gap. As at end-December 2025, current liabilities exceeded current assets by RM890.3 million, underscoring near-term funding pressures and the need for financial restructuring or support.
What I Learned from This Case
This case highlights several important lessons about property, construction, and infrastructure-linked companies in Malaysia:
First, reliance on one-off gains — such as asset disposals — can distort a company’s true operating performance. Without these gains, underlying profitability may be much weaker than it appears.
Second, infrastructure concessions like highways can be financially burdensome in the early stages. Projects such as EKVE require heavy upfront capital and financing, leading to high interest costs before traffic volume and toll revenue can stabilise.
Third, strong revenue growth does not necessarily translate into profitability. Even though AZRB doubled its revenue, rising costs and financing burdens erased potential gains.
Fourth, a healthy order book in the construction segment provides visibility for future income, but it does not immediately solve cash flow or balance sheet stress — especially when projects are capital-intensive.
Finally, liquidity is critical. The auditors’ going-concern warning shows that even established contractors can face financial strain if liabilities significantly outweigh short-term assets, making restructuring or refinancing essential for survival.
Overall, AZRB’s situation reflects the broader risks in Malaysia’s construction and infrastructure sector — where growth opportunities exist, but financial discipline and project timing are crucial to long-term sustainability.
Malaysia