KUALA LUMPUR: Engineering firm LFE Corp Bhd expects to see a significant improvement in its financial year ending July 31, 2015 (FY15), thanks to a RM350 million contract it recently secured to develop the Shapadu City Village in Putrajaya, but the group is still unsure when its Practice Note 17 (PN17) status will be lifted.
“The 36-month Shapadu contract that we recently closed is worth RM350 million. If we apportion it accordingly, it would be of significant growth to our revenue,” managing director Liew Kiam Woon told reporters after the group’s annual general meeting yesterday.
LFE Corp had on Dec 16 received a letter of award from Shapadu Boulevard Sdn Bhd to undertake the engineering, procurement and construction of the project with a provisional contract sum of RM350 million. The project was expected to commence mid-December.
Assuming that the project delivers an average RM9.72 million monthly during the 36-month contract period, LFE Corp will have got at least RM68.04 million for the remaining seven months of FY15, more than double its FY14 revenue of RM32.09 million.
The group is also currently in talks with several Myanmar counterparts for additional contracts, though Liew declined to disclose the amounts involved.
“We have received many enquiries from Myanmar — the contract amounts are sizable. Other than that, our Vietnamese partner has also indicated to restart our works there, which had previously halted,” he said.
Its seemingly better prospects notwithstanding, the group is unsure when Bursa Malaysia would approve its regularisation plan.
The group had in 2012 fallen into PN17 status when its shareholders’ equity went below 25% of its total issued and paid-up share capital.
In FY14, its shareholders’ fund fell another 3% to RM10.83 million from RM11.12 million in FY13.
Its executive director Juliana Quah Kooi Hong said if the regularisation plan could not be accepted by the local bourse, LFE Corp will have to seek an alternate regularisation plan.
“Taking the group private is the last resort, considering our shareholders’ benefit,” she said.
For FY14, LFE’s earnings plunged by 98.5% to RM198,000 from RM13.43 million in the previous financial year, while revenue fell more than half to RM32.09 million from RM72.53 million.
This article first appeared in The Edge Financial Daily, on December 30, 2014.