EcoBuilt Holdings Berhad: Detailed Review of Financial Results and Corporate Updates for Period Ended 28 February 2026

Key Points from the Financial Report

• Revenue and Profitability: For the period ended 28 February 2026, EcoBuilt Holdings Berhad recorded revenue of RM22.62 million for the quarter and RM127.09 million for the cumulative period. The Group reported a gross profit of RM8.90 million for the quarter and RM14.42 million for the cumulative period. However, the Group posted a net loss of RM6.96 million for the quarter and RM7.49 million for the cumulative period, mainly due to an impairment loss on goodwill of RM5.89 million and fair value losses on financial assets.
• Impairment Loss and Fair Value Losses: The results were significantly impacted by an impairment loss on goodwill of RM5.89 million and a fair value loss on financial assets at fair value through other comprehensive income amounting to RM2.41 million (cumulative).
• Taxation: The Group recorded a substantial deferred tax expense of RM8.30 million, impacting the bottom line.
• Capital Reduction: A capital reduction exercise amounting to RM35 million was undertaken, offsetting accumulated losses and leaving retained earnings at RM1.20 million as of 28 February 2026.
• Change of Financial Year: The Group changed its financial year end from 31 August to 28 February. The next audited accounts will cover an 18-month period from 1 September 2024 to 28 February 2026.
• Balance Sheet Position: As of 28 February 2026, total assets stand at RM149.97 million, with total equity of RM30.95 million (net assets per share: 7.36 sen). Cash and cash equivalents remain tight, with a negative RM30,000 at period end.

Important and Price-Sensitive Items for Shareholders

1. Ongoing and Material Litigations:
   • Winding-Up Petitions and Court Actions: Several winding-up petitions have been served against the Group’s subsidiaries (notably Rexallent Construction Sdn. Bhd. and Eko Bina Sdn. Bhd.) by creditors including PLP Electrical Engineering, Inflextec Engineering, Freyssinet PSC, and others. Some have resulted in settlement agreements or are subject to ongoing Schemes of Arrangement with creditors.
   • CIPAA Adjudication Awards: Eko Bina Sdn. Bhd. won a significant adjudication award under the Construction Industry Payment & Adjudication Act 2012 (CIPAA) against Golden Wave Sdn. Bhd., with claims exceeding RM23 million. However, collection risk exists as Golden Wave was wound up in July 2025, and court proceedings are ongoing.
   • Scheme of Arrangement: Both Eko Bina and Rexallent have filed for Schemes of Arrangement with their creditors under Section 366(1) of the Companies Act 2016. The courts have granted restraining orders, with the next major creditor meeting adjourned and pending within the next two months. This signals ongoing financial distress and restructuring within the Group.
2. Auditor’s Qualified Opinion and Internal Control Issues:
   • The external auditor issued a qualified opinion on the financial statements for the period ended 31 August 2024, citing inability to obtain sufficient audit evidence on trade payables (RM91.7 million) and advance payments to suppliers (RM4.65 million). These unresolved issues may affect investors’ confidence in the Group’s reported financial position and could be price sensitive.
   • Management states that efforts are underway to resolve these issues, including additional manpower and project manager involvement to reconcile outstanding trade payable balances and supplier payments.
3. Corporate Proposals and Asset Disposal:
   • Asset Disposal: The Group has entered into a Sale & Purchase Agreement to dispose of a piece of vacant freehold industrial land in Selangor for RM5.74 million. The transaction is pending fulfilment of conditions precedent and has not yet been completed.
   • Business Diversification: The Group proposes to diversify into property development and building material trading to strengthen its earnings base.
   • New Subsidiary: Incorporation of Exo Construction Sdn. Bhd. as a wholly-owned subsidiary, though business activities have not yet commenced.
4. Cash Flow and Liquidity:
   • The Group’s cash flow remains under pressure. While net cash generated from operations was RM5.25 million for the period, cash and cash equivalents were negative at RM30,000 due to bank overdrafts and pledged deposits. Liquidity risk remains high and may affect the Group’s ability to meet short-term obligations.
5. Borrowings and Gearing:
   • Total borrowings as at 28 February 2026 were RM3.16 million (secured), highlighting the Group’s reliance on short-term facilities such as bank overdrafts to manage working capital needs.
6. Project Pipeline and Sector Outlook:
   • The Group is currently executing a RM190 million mixed development project, targeted for completion by September 2027. The construction sector is expected to recover, supported by public infrastructure projects and private sector development, but challenges remain due to high material prices, labour shortages, and economic uncertainties.
7. No Dividend Declared:
   • The Board has not recommended any dividend for the reporting quarter, reflecting the Group’s focus on liquidity and financial recovery.

Additional Details and Considerations

• Restatement of Prior Figures: There was a restatement of trade and other receivables and accumulated losses as at 31 August 2024 due to previously identified errors.
• Contingent Liabilities: As at 28 February 2026, the Group’s contingent liabilities relating to corporate guarantees for subsidiaries and suppliers totalled RM3.24 million, compared to RM50.89 million as at 31 August 2024.
• Future Prospects: The Group is tightening project standard operating procedures, budget variance monitoring, and change order controls to prevent cost overruns and ensure project profitability.
• Earnings Per Share: Basic loss per share stood at (1.65) sen for the quarter and (1.78) sen for the cumulative period, reflecting the impact of impairments and operational losses.
• Fair Value of Financial Instruments: Financial assets at fair value through other comprehensive income were valued at RM9.43 million as at 28 February 2026.

Conclusion

EcoBuilt Holdings Berhad is navigating a challenging period marked by operational losses, significant impairment charges, qualified audit opinions, multiple legal proceedings, tight liquidity, and active restructuring efforts. Although the Group has secured a sizeable adjudication award and is undertaking corporate actions to improve its balance sheet, unresolved legal disputes, auditor concerns, and ongoing creditor arrangements present key risks to shareholders. The Group’s commitment to operational improvements and sector diversification offers some upside, but financial and legal risks remain material and could impact the share price accordingly.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any securities. Investors are advised to consult with their financial advisors before making investment decisions. The article is based on unaudited interim financial statements and other public disclosures as of 28 February 2026; subsequent developments could affect the outlook and information presented herein.

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