Cymao secures subcontract worth RM134m for mixed development project in Perak

KUALA LUMPUR (Jan 20): Cymao Holdings Bhd's unit has secured a subcontract worth RM134.02 million for a proposed mixed development project at Wilayah Sungai Kelian Baru, Mukim Batang Padang in Perak.

According to a filing with Bursa Malaysia today, its wholly-owned subsidiary Billion Apex Sdn Bhd (BASB) today accepted a letter of award from HYC Properties Sdn Bhd for site clearance, hoarding and earthworks for the proposed project.

The group said the completion date for the subcontract works is within 24 months from the commencement date, subject to the requisite approvals from the relevant authorities for the proposed mixed development project having been obtained.

"The company is not privy to information in regard to details of the proposed mixed development project, the estimated gross development value, gross development costs and the overall timeline of the proposed mixed development project as it is merely undertaking the scope of works," said Cymao.

It said it will begin applying for the requisite construction licences, such as construction licence from the Construction Industry Development Board, to enable the company to undertake construction projects.

"At the point of application, the grade of the construction licence to be applied by BASB will depend on the financial qualification of BASB and qualification of the technical personnel to be recruited by BASB.

"Barring any unforeseen circumstances, BASB will submit the application for the construction licence to the Construction Industry Development Board in the second quarter of 2021. In the meantime, BASB will identify and appoint a qualified subcontractor with the requisite licences to undertake the award," said Cymao.

Cymao said over the past few years, the group has seen increasing challenges in the plywood industry and declining revenue from its existing plywood business. Thus, the company has identified construction as a new viable business to improve its financial performance.

As Cymao is relatively new in the construction industry, it said the award would help build its credentials as well as its track record as a construction player in the construction industry.

Moving forward, the group would be more competitive and this would support the group's bid and tender for future construction and project management projects, said Cymao.

"The board believes that the award is expected to provide additional revenue stream and enhance the group's profits, thereby reducing its dependence on the plywood business and improve the group's financial performance and the shareholders' value.

"The award is expected [to] contribute positively to the company's future earnings, earnings per share and enhance the consolidated net assets of the company while the group's gearing will depend on, amongst others, the manner of funding for the award," it added.


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