Bina Puri sees lower construction revenue this year

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KUALA LUMPUR (Oct 8): Bina Puri Holdings Bhd sees lower revenue from its construction segment this financial year ending Dec 31, 2014 (FY14), as several projects including klia2 had been completed, while new projects awarded are still at the initial stage.

For the FY13, construction segment recorded RM858.4 million in revenue and RM7.36 million in profit before tax (PBT), accounting for 81.5% and 54% of group revenue and PBT respectively — which stood lower than FY12.

Nevertheless, Matthew Tee, group executive director, said Bina Puri’s construction order book of RM2 billion will last the group over the next five years.

“[In absolute amount], construction revenue will be slightly lower than last year, as the klia2 project has been completed already [in April]. Also, some projects that just got awarded are just at the commencement stage, thus the progress billing may not that be much,” he explained.

“We will continue to tender [for projects]. At any one point, we are tendering about RM10 billion worth of projects every year, with a strike rate of 10%,” he added.

While construction — its bread and butter — will still be the main segment driving Bina Puri’s performance moving forward, Tee said it is the group’s conscious effort to be less dependent on this segment, which is cyclical and offers low single digit margins.

He said the group aspires to have construction’s contribution to revenue to decrease to 40-50% in the next five years, with the remaining from property development, quarry and readymix concrete, polyol, and power supply.