Ireka Corp appointed as contractor for RM232.74m packages

KUALA LUMPUR: Ireka Corporation Bhd's (Ireka Corp) unit Ireka Engineering & Construction Sdn Bhd has been appointed as a contractor for an office and hotel development at KL Sentral, it announced to Bursa Malaysia on Friday, Nov 26.

The company had received a letter of intent from Transmission Technology Sdn Bhd for its appointment as the contractor for architectural as well as mechanical and engineering (M&E) works valued at RM232.74 million.

The packages will cover two levels of basement, 13 levels of the podium including the level nine slab, as well as two office towers of 27 stories and 37 stories each.

In a separate announcement, Ireka Corp has posted a net loss of RM87,000 for its second quarter ended Sept 30, 2010, down from a net profit of RM2.13 million a year ago following a share of loss in an associate company and a mark-to-market loss for share investment.

The group accounted for the share of loss in its 23%-owned Aseana Properties Ltd (ASPL) of RM7.5 million and a mark-to-market loss for its share investment in Kinh Bac City Development Shareholding Corporation of about RM1.99 million.

Turnover grew 21.3% to RM108.02 million from RM89 million a year ago on more completed construction works.

Basic loss per share stood at 0.08 sen, down from 1.87 sen while net assets per share stood at RM2.06 sen, from RM2.09 sen.

At its AGM, the group's shareholders had on Sept 23 approved of a first and final single-tier dividend of 5% for FY2010, to be paid out on Dec 15 with an entitlement date at Nov 25.

On its prospects, the group said it expected to maintain its construction division's turnover this year based on its existing order book of about RM1.06 billion, of which RM460 million remain outstanding.

The group had bid for jobs totaling RM1 billion and will continue to try replenishing its order book over the course of the year.

Its construction projects are expected to contribute positively to its results, said Ireka Corp.

Meanwhile, the group anticipates fee income from its property development management to continue declining on expected lower net tangible assets of ASPL coupled with the weakening US dollar.

While the economic slump has affected the real estate markets in Malaysia and Vietnam, the group expects both markets to continue to improve this year.