KUCHING: KKB Engineering Bhd’s subsidiary, Harum Bidang Sdn Bhd, has secured a supplementary contract for the supply and delivery of concrete-lined mild steel pipes and mechanical couplings for RM46.7 million.
The contract is from CMS Infra Trading Sdn Bhd, a subsidiary of Cahya Mata Sarawak Bhd (CMS). CMS is KKB’s second largest shareholder, with a stake of 20.05 per cent.
The supply of the steel pipes and mechanical couplings to JKR central unallocated stores in Tanah Puteh here is on “as and when required” basis, KKB told Bursa Malaysia in a filing. The supplementary contract expires on Aug 31, 2020.
KKB expects the supplementary contract to contribute positively towards the company’s earnings and net assets for the contract duration period.
The latest contract was the second in five months secured by KKB group. In July, the company’s oil and gas unit, OceanMight Sdn Bhd, was awarded a contract by Petronas Carigali Sdn Bhd for the provision of engineering, procurement, construction, commissioning of wellhead platforms for D18 phase 2 project.
With the award of the D18 phase 2 project, the total combined contract sum for both D28 phase 1 (secured earlier by OceanMight) and D18 phase 2 projects is about RM226 million. The latest supplementary contract has given a further boost to KKB group order book, which stood at about RM900 million as at September 30, 2018.
The group’s single biggest on-going contract is a RM1.29 billion work package for the Pan Borneo Highway project which KKB is implementing with joint venture partner WCT Holdings Bhd. KKB and WCT have 70 per cent and 30 per cent equity interest respectively in the joint venture.
By end of this month, KKB group would have bid further open tenders worth RM350 million, according to its group executive director Kho Pok Tong, recently. These new tenders cover oil and gas, water and steel pipe supplies projects.
KKB expects to know the outcome of the new contracts it has bid for in the first half-2019.
Steel fabricator KKB owns water pipes manufacturing facilities here and in Sabah.
In the third quarter ended Sept 30, 2018 (3Q-2018), KKB reported strong financial results, with group revenue surged to RM112.2 million from RM49.3 million in 3Q-2017 while group pre-tax profit soared to RM10.6 million from RM6.8 million previously.
The first nine-month group revenue stood at RM269.9 million, which was 94 per cent higher from RM139.1 million in the same period last year. The group bounced back with pre-tax profit of RM16.4 million from loss of RM3.9 million during the same period.
With the contracts in hand, KKB has expressed optimism that its engineering and manufacturing segments would perform favourably towards a sustainable growth for the current financial year ended Dec 31, 2018.
