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KUALA LUMPUR: Protasco Bhd expects contribution from its construction and property development segments to increase by 10% to 20% respectively of the group’s revenue this year, said its executive vice-chairman and group managing director Datuk Seri Chong Ket Pen.
Protasco’s bread-and-butter business is in road maintenance, which currently makes up 60% of its revenue. Both construction and property development divisions contribute about 10% each. The company has three other business segments, namely consultancy, education and trading.
“We will proportionately reduce maintenance’s contribution [to revenue] in terms of percentage,” Chong told reporters after the company’s annual general meeting yesterday.
Protasco is targeting for maintenance to contribute about half of its revenue over the next few years, with an eye on reducing it to 40% in the long run, while construction and property development are targeted to increase to 20% each this year.
“We want it to be a very healthy level,” said Chong, adding that a high contribution from only one segment represents too much risk for the company. “We want the high-growth areas like construction and property development to take up the other balance.”
Protasco has a construction order book of RM710 million and a tender book of close to RM1 billion. The projects are mainly concentrated locally, with some overseas projects including road maintenance works in Libya which have been reported to have restarted.
“We are confident [of successfully winning some of the bids]. Wait for the announcement,” said Chong. “The projects are infrastructure-related, [namely] roads, bridges, buildings, drainage, irrigation. We also do not announce some of the smaller works which we have completed.”
On the property development front, Protasco plans to launch RM200 million worth of projects per year.
Phase 2A of its De Centrum Mall project in Kajang, Selangor was recently launched, and Phase 2B is due for a launch next year. The project consists of university apartments which are built on the 100-acre (40.46ha) piece of freehold land on which Protasco’s office is located.
With the diversification in business drivers, Chong is confident that it will achieve its 15% net profit target for the year.
Protasco shares closed down 2 sen or 0.94% at RM2.11 yesterday, giving it a market capitalisation of RM705.9 million.
This article first appeared in The Edge Financial Daily, on June 25, 2014.
