Salcon confident of meeting RM20mil pre-tax profit: CEO

  • Business
  • Wednesday, 23 Jul 2003


SALCON BHD, which is aiming for a KLSE main board listing in the first week of September, is confident of achieving more than RM20mil in pre-tax profit for the year ending July 31 compared with RM12.5mil the previous year, said chief executive officer Lim See Teok. 

“For the six months ended Jan 31, we had already achieved RM123.3mil turnover and RM11.5mil in pre-tax profit, which is about 80% of the profit for the whole of last year,'' he told reporters after signing an underwriting agreement with AmMerchant Bank Bhd in Kuala Lumpur yesterday. 

AmMerchant Bank is the financial adviser and managing underwriter for Salcon's share flotation, with Alliance Merchant Bank Bhd, Mayban Securities Sdn Bhd and KAF-Seagrott & Campbell Securities Sdn Bhd as co-underwriters. 

Lim attributed the profits rise this year to Salcon's involvement in turnkey projects since 2000. Previously, the company only undertook mechanical and electrical engineering jobs. 

Lim said Salcon expected a healthy revenue stream from operations in the next 10 years as about 40% of its revenue was recurring income. 

“For instance, we have 16 more years before completing our operations in Vietnam, and nine more years for the RM200mil Negri Sembilan Water Department contract secured last year,'' he said. 

Salcon currently has RM650mil worth of projects in hand, of which 20% came from countries such as Vietnam, Thailand, India, China and Indonesia. 

Salcon, which is principally an investment holding company, was incorporated in September 2002 to assume the listed status of Seng Hup Corp Bhd pursuant to a restructure of the latter.  

It is a leading engineering company in the water, wastewater and palm oil milling industries in Malaysia, with more than 28 years of experience. 

Lim said Salcon would raise RM35mil from its flotation exercise. ''Of the total proceeds, RM28mil will be used to pay the creditors of Seng Hup Corp, RM4.5mil for working capital and the balance to meet restructuring and listing expenses.''  

Salcon chairman Tan Sri Razali Ismail said the listing exercise involved the issuance of 29.2 million new 50 sen shares at RM1.20 each by the company and an offer for sale of 17.92 million shares by existing vendors  

Of the total, 37.12 million shares are for local and foreign institutional investors; 6.8 million for eligible employees and directors of Salcon, its parent company and business associates; and 3.2 million for subscription by the Malaysian public.  

The company had successfully completed more than 700 water and wastewater-related projects and 80 palm oil mill projects both locally and overseas, Razali said. 

“Today, Salcon has carved a niche for itself as the foremost Malaysian engineering company specialising in the design, construction, operation and maintenance of water and wastewater treatment plants. We also want to be in the forefront of projects in China, Sri Lanka and other Asean nations,” he said.  

Meanwhile, AmBank Group chairman Tan Sri Azman Hashim said that including Salcon,, AmMerchant Bank would have helped list 17 companies on the KLSE main board, second board and the Mesdaq market since the beginning of this year. 

The merchant bank, he said, was currently acting as adviser and lead manager for many more companies that had obtained Securities Commission approval for listing in the coming months.  

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