KKB receives RM48 mln worth of new contracts from state government
Posted on August 16, 2012, Thursday
KUCHING: KKB Engineering Bhd (KKB) recently added a new contract to its order book with the proposed transmission pipeline to Sama Jaya Free Industrial Zone approved by the Sarawak state government.
The latest RM48 million contract is expected to significantly boost KKB’s bottom line from the second half of 2102 (2H12) onwards.
According to the research arm of AmInvestment Bank Group (AmResearch), it said that KKB would take 24 months to complete the project by the third quarter of 2014, which was subject to the terms and conditions to be agreed upon between the state government and the company.
“This latest contract brings the total amount of jobs secured year-to-date to RM250 million, bolstered substantially by the RM171 million structural steel contract with Pertama Ferroalloys Sdn Bhd that was secured much earlier for the proposed ferro alloy complex in the Samalaju Industrial Park, Bintulu, Sarawak,” noted the analyst.
KKB said that the latest contract was expected to contribute positively to the earnings and net assets of the group for the financial year ending 2013 to 2014.
The research firm gathered that the group’s first half of 2012 (1H12) results had been a disappointment as it was affected by fewer jobs in engineering as the segment’s revenue fell 56 per cent to only RM38 million from RM87 million a year earlier.
“The group’s track record in completing its projects on schedule and delivering on time put it in good stead to secure various engineering projects in the Sarawak Corridor of Renewable Energy (SCORE) and other infrastructure works for the supply, laying and commissioning for water pipes and other related works in Sarawak and Sabah,” added AmResearch.
The research firm maintained its feel good analysis for KKB’s share price based on other potential engineering and construction jobs remaining within Samalaju; its water pipes supply for the rural water projects and attractive dividend yield of seven per cent.