Sarawak Consolidated Industries and its unit bag contracts worth RM821m

Sarawak Consolidated Industries and its unit bag contracts worth RM821m
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KUALA LUMPUR (Feb 9): Sarawak Consolidated Industries Bhd (SCIB) and its unit have bagged contracts worth RM821.32 million in Malaysia and Qatar for engineering, procurement, construction and commissioning (EPCC) projects.

In a bourse filing today, the company said it has received a letter of award and acceptance (LOA) for an EPCC project in Kuching, Sarawak worth RM421.97 million for the proposed mixed development of Lot 6036 Block 26 Muara Tuang Land District and part of River Bank reserve.

It said the expected duration of the project is 108 months, while the client for the project is Lestari Asiabina Sdn Bhd.

Meanwhile, the group's wholly-owned subsidiary SCIB International (Labuan) Ltd has accepted the LOA for an EPCC contract in Qatar worth US$98 million (approximately RM399.35 million).

The client for the Qatar project is Interceptor Trading & Contracting Co W.L.L, according to SCIB.

The expected duration to complete the project is 30 months, from February 2021 to July 2023, noted the group.

"The contracts secured will not have any effect on the issued share capital and the shareholdings of substantial shareholders of the company.

"The contracts secured are not expected to have any material effect on the net assets of SCIB and its group of companies (SCIB Group) for the financial year ending Dec 31, 2021. Any profits attributable to the group would be realised in stages over the tenure of the contracts based on the progress of the projects," said SCIB.

It added the contracts are expected to contribute positively to the group's future earnings over the duration of the contracts.

On risk factors, SCIB said the contracts are subject to normal business risks such as construction risk, increase in cost due to any escalation of material costs, availability of skilled manpower, materials and contractual terms including default provision and subcontractors' performance as well as foreign exchange risks due to currency fluctuations.

"However, SCIB will put in place control measures and operational procedures to mitigate the risks," it added.

At the time of writing, SCIB shares were five sen or 2% lower at RM2.45, valuing the group at RM1.25 billion. It saw some 30.5 million shares done.

Joyce Goh