Merge Energy bags RM158mil project

PETALING JAYA: Merge Energy Bhd has bagged a water-treatment project worth more than four times its market capitalisation via its wholly-owned subsidiary.

The small-scale construction and property development company said in a filing with Bursa Malaysia that its unit Mewah Kota Sdn Bhd had accepted the letter of award for a RM157.96mil project from the East Coast Economic Region Development Council for the construction and completion of the Ganchong water treatment works, main distribution pipeline, booster pump stations and associated works in Pekan, Pahang.

“The construction period is for 148 weeks,” Merge Energy said.

Merge Energy said the project was expected to be completed by Jan 16, 2017 and contribute positively to group earnings.

Merge Energy’s market capitalisation stood at RM34.2mil based on yesterday’s closing price on Bursa of 51 sen.

Year to date, the company’s shares had gained 54.5% from 33 sen on Jan 3.

Despite lower revenue, Merge Energy saw its net profit increase 69.2% to RM1.5mil for the nine months ended Oct 31, 2013, from RM883,000 in the previous corresponding period.

Consequently, its earnings per share rose to 2.23 sen from 1.32 sen previously.

The group’s revenue, however, was lower at RM74.1mil, compared with RM114.9mil previously.

As at Oct 31 last year, Merge Energy had debts totalling RM997,000, which was substantially lower than the RM4.41mil recorded in the corresponding period in 2012.

The company had cash and cash equivalents of RM7.7mil as at Oct 31, 2013, down from RM8.4mil in the previous corresponding period.