This article first appeared in The Edge Financial Daily on January 14, 2020

PENANG: Construction outfit Kerjaya Prospek Group Bhd sees better prospects this year amid expectations of clinching more and bigger jobs.

“I am confident that Kerjaya Prospek will be better off than last year, as we are in a better position and ready for bigger and more job wins this year,” Kerjaya Prospek executive chairman Datuk Tee Eng Ho told The Edge Financial Daily after the signing ceremony of a RM617 million contract yesterday.

The optimism also hinged on the group winning the RM617 million contract from Aspen Vision City Sdn Bhd here, Tee noted.

Aspen Vision City is a joint-venture company between Aspen (Group) Holdings Ltd and IKEA Southeast Asia. The contract involves the first phase to develop 1,530 units of VIVO executive apartments and for the second phase, 980 units of VIIO executive apartments.

The latest job win expanded its outstanding order book to about RM3.5 billion to date, keeping it busy for three years.

“We have kicked off the year with [an] over RM600 million new contract win so far, and there are 11 months remaining for us to strive for more and bigger job wins,” he said.

Last year, Kerjaya Prospek secured a total contract sum of about RM1.3 billion, surpassing its internal target of RM1.2 billion.

Currently, the group is bidding for more than RM2 billion worth of construction jobs from the private sector, including those in Kuala Lumpur and Penang.

He said some projects in Kuala Lumpur that the group has tendered for are worth as much as RM900 million per project.

“In the current market conditions, not many contractors have the ability [or appetite] to take up such big projects [with higher values], as many of them are short of cash on hand.

“For us, we built our name (credibility) with our top-notch quality [offerings]. In addition, we are in a net cash position.”

Tee explained that large projects often require the construction company to have cash to demonstrate its ability to accept new projects for the costs involved. The group’s net cash position was RM190.8 million as at Sept 30, 2019.

Construction works for VIVO — taking 38 months from the scheduled commencement on Feb 14, 2020 — are slated for completion by April 2023, and VIIO shall be completed within 36 months from the commencement date to be determined later.

Before the trading suspension, Kerjaya Prospek shares were last traded at RM1.32, with a market capitalisation of RM1.63 billion.