KUALA LUMPUR (Oct 7): Ireka Corp Bhd has bagged a two-year engineering contract worth RM196 million for a 'Fibre-To-The-Home Connectivity Project' in Langkawi, Kedah.

In a statement Thursday, Ireka said it secured the project from Fec Telco Sdn Bhd via its wholly-owned Ireka Engineering & Construction Sdn Bhd (IECSB). Fec Telco is a wholly-owned subsidiary of Wanland Metro Sdn Bhd.

Ireka said the project will be undertaken in two parts. The first is the civil works component, including supply and installation of fibre-optic cables and related equipment, pole installations and commissioning works. The second part is the network, IT and services components — including the design and operations of the Fibre-To-The-Home network, business systems support that includes all IT, operation support system and over-the-top services to targeted end-users.

The contract is expected to contribute to its earnings from the financial year ending March 31, 2022 onwards.

Meanwhile, managing director Hasnul Ismar Mohd Ismail said Ireka's future direction is go back to basics and focus on its core strength in construction, infrastructure works, telecommunication infrastructure as well as property development.

The group also noted it had completed a kitchen sinking exercise recently, whereby it logged impairment loss from the reclassification of Aseana Properties Ltd (ASPL) as an associate company to an investment of RM25.9 million, retirement benefits of certain ex-directors of about RM3.5 million and losses incurred by the business segment due to the pandemic, which disrupted its business and operations.

"This has also helped to address some of the concerns raised by the group’s external auditor, Messrs Crowe Malaysia PLT, over a material uncertainty in relation to the carrying amount of Ireka’s investment in ASPL and its subsidiaries.

"Going forward, Ireka will explore more fund-raising activities to strengthen its cash flow and balance sheet in order to undertake more projects in the future. The group has just completed a successful private placement exercise recently that raised RM11.3 million. The strong response from potential investors is a reflection of the confidence the market has in the management to steer the group back to profitability and will help to accelerate the turnaround plans for Ireka," the group added.

Ireka’s share price closed half a sen or 0.7% higher at 68 sen, with 9.71 million shares done, giving it a market capitalisation of RM139.66 million.