Matthew TeeKUALA LUMPUR (June 29): Bina Puri Holdings Bhd, whose net profit slumped 34.5% in the first quarter ended March 31, 2016 (1QFY16), is confident of getting about RM1 billion new jobs and achieving its net profit growth target of 20% in FY16, underpinned by massive local infrastructure works.

The group is bidding for up to RM10 billion jobs this year, of which it expects to grab some 20%.

Its executive director Matthew Tee Kai Woon (pictured) told The Edge Financial Daily after Bina Puri’s annual general meeting yesterday that he expects the group’s earnings to pick up in the 2Q, due to potential projects that he is confident of securing.

Tee said the group’s 1QFY16 results were dragged by overall weak sentiment in the construction and property markets, higher expenses incurred on higher steel prices, foreign labour cost, and the goods and services tax.

He also noted that the property segment that used to contribute significantly to the group’s bottom line had not shown strong growth in recent years.

The group’s net profit declined to RM812,000 in 1QFY16, from RM1.24 million a year ago, as revenue fell 13% to RM294.48 million, from RM338.41 million.

The group’s slow order book replenishment has been a concern for analysts, though this may have been allayed after the group secured a RM73 million contract for the execution of pipe sleeper and underground services for Package-22 of the Rapid project.

“We are a bit slow in getting new projects in the first half, but we are quite optimistic about the second half,” Tee said.

Among the projects the group is bidding for are the Damansara-Shah Alam Highway, the Shah Alam-Ulu Kelang Expressway, the Duta-Ulu Klang Expressway 3, the Pan Borneo Highway, the Bus Rapid Transit and PR1MA’s affordable homes.

The group’s unbuilt order book stands at RM1.6 billion, which is expected to sustain its earnings for the next three years. Currently, 85% of the group’s turnover is from construction.

Meanwhile, Tee said the group had rescheduled the launching of new property projects amid softening of the property market.

However, he expects property earnings contribution to rise slightly from last year, underpinned by The Opus serviced apartment project, which carries a gross development value (GDV) of RM338.1 million.

The group has about 11 property projects, with a total expected GDV of RM3.1 billion. The property segment contributed only 6% of the group’s earnings in FY15, compared with 9% in FY14, due to softer take-up rates, partly due to more stringent loan application requirements.

Meanwhile, Tee is expecting a 20% annual earnings growth for its power plant business, supported by the group’s hydro plant, which began commissioning last month.

The group’s power supply’s profit before tax for FY15 stood at RM4.19 million.

Despite Brexit-led uncertainties, Tee said Bina Puri’s power arm listing plan remains intact. The group plans to raise US$4 million (RM16.24 million) via the initial public offering of its Indonesian energy arm, PT Megapower Makmur Tbk.

“This is not a big listing. I think the appetite is there as not many companies are listed in Indonesia, and we are one of the few,” he said.

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This article first appeared in The Edge Financial Daily, on June 29, 2016. Subscribe to The Edge Financial Daily here.

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