RM949mil job for Muhibbah

Engineering firm and partner awarded effluent treatment plant contract for Rapid

PETALING JAYA: Construction firm Muhibbah Engineering (M) Bhd and its consortium partner, India’s Va Tech Wabag Ltd (Wabag), have clinched a RM949.6mil effluent treatment plant (ETP) contract for the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor.

“The contract is scheduled to start in the third quarter of 2015 and slated for completion by the end of 2018,” Muhibbah said in a filing with Bursa Malaysia.

The ETP contract, which will form part of the Rapid complex in Pengerang, was awarded by PRPC Utilities and Facilities Sdn Bhd, a unit of Petronas Refinery and Petrochemical Corp Sdn Bhd, which is also wholly owned by Petroliam Nasional Bhd (Petronas).

“The purpose of the Integrated ETP is to reduce the pollution in the aqueous effluents of the Rapid complex to below the regulatory discharge limit,” it said.

Both Muhibbah and the Chennai-based Wabag would be carrying out a design competition for re-feed and engineering jobs as well as procurement, construction and commissioning works of the ETP project, said Muhibbah.

The contract, the company said, would contribute positively to its earnings and net assets for the current and future financial years.

Muhibbah had a total outstanding secured order book of RM2.1bil as at Aug 21, 2015.

CIMB Research, in a recent report, said Muhibbah’s outlook was backed by the group’s RM4bil jobs in tender, mainly in Petronas’ Rapid.

“With a tender book of RM4bil-RM5bil over the next 12-18 months and expectations of more potential job awards in the second half of 2015, total infra wins could rise to as much as RM1bil this year,” it said.

Muhibbah, however, saw weaker earnings in the second quarter ended June 30, with an 8% fall in net profit to RM19.26mil from RM20.93mil, while revenue slumped 12% to RM410.34mil.

In the six-month period, although its earnings grew 3.5% to RM42.55mil from RM41.09mil a year ago, revenue fell by 10.1% to RM773.55mil compared with RM860.09mil previously.

The group’s crane and airport divisions were reported to be beneficiaries of the US dollar appreciation, as most of its revenue is in that currency.

Muhibbah’s stock was up eight sen or 4.55% to close at RM1.84 yesterday, with a market capitalisation of RM862.1mil.

Wabag operates India’s largest seawater reverse-osmosis plant and has built more than 600 plants worldwide, according to Bloomberg.

The company is said to have orders valued at almost 70 billion rupees and had recently bagged a 2.2 billion rupee job order to build a sewage treatment plant along the Ganges River.