DRB-Hicom expects RM350m contract extension

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KUALA LUMPUR: DRB-Hicom Bhd’s unit CTRM Aero Composites Sdn Bhd has exchanged a letter of intent with UTC Aerospace Systems for the extension of CTRM’s supply of three existing work packages.

In a filing with Bursa Malaysia yesterday, DRB-Hicom (fundamental: 1.5; valuation: 1.8) said the discussions between the two parties are ongoing during the Langkawi International Maritime and Aerospace Exhibition.

The group anticipates the tenure of the contracts, which were awarded in 2003 with a contract value of approximately RM4.2 billion, to be extended up to seven years with an average annual value of RM350 million.

The contracts entail the supply of major composite structures, including fan cowls, inlet cowl panels and thrust reversers.

“We are very excited about our discussions regarding the potential continuation of our work with UTC Aerospace Systems. 

“If awarded, this work could provide tremendous opportunities for our company to build capacities and capabilities in this high-value and high-technology business,” said DRB-Hicom group managing director, Tan Sri Mohd Khamil Jamil.

DRB-Hicom closed one sen or 0.5% lower at RM2, with a market capitalisation of RM3.89 billion.

 

This article first appeared in The Edge Financial Daily, on March 20, 2015.