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Sunway lands RM218m worth of jobs

KUALA LUMPUR: Sunway Holdings Bhd has clinched two contracts worth RM218.82 million that will contribute to its earnings ending Dec 31, 2011 onwards.

The company told Bursa Malaysia on Monday, Jan 3 that it had received a letter of award (LoA) for the proposed design, construction, completion, fitting, commissioning and maintenance of the main infrastructure and satellite works for the Universiti Teknologi Mara campus expansion. The contract, which is a private finance initiative (PFI), was awarded by TRIPlc Industries Sdn Bhd and is expected to be completed in two years or by Jan 31, 2013.

Additionally, Sunway received another LoA for the design, construction and completion of the proposed link bridge phase 2 from Impiana KLCC to Pavilion KL from KLCC (Holdings) Sdn Bhd.

This second project is slated for completion by Oct 30, 2011. Sunway did not, however, specify the respective value of the two contracts individually. Both jobs were secured by Sunway's wholly owned unit Sunway Construction Sdn Bhd (SunCon).

The company said the proposed projects are subject to normal construction risk of fluctuation in material prices.

"However, with past experience and expertise of SunCon in construction projects in Malaysia, this risk could be mitigated at this juncture," said Sunway.

According to analysts estimates, Sunway's construction order book stood at around RM2.3 billion as at Dec 31, 2010.

These two jobs come almost on the back of Sunway securing another relatively large and potentially lucrative contract.

In late November last year, Sunway in a filing with Bursa Malaysia said the Housing and Development Board of Singapore had awarded the company a tender for a parcel of land in Tampines Avenue 8 on a 99-year lease term at S$187.59 million (RM447.4 million).

ECM Libra Investment Research in a recent note revised Sunway's earnings by 1.1% for the financial year 2012, taking into account contributions to be generated by the Tampines development.

The research firm noted that the group's Singaporean projects had so far garnered strong sales. It maintained Sunway as its top buy for the construction sector.

This is based on a strong earnings growth this financial year, possibly more landbank acquisitions and more overseas construction contracts.
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