Crest Builder targets non-infrastructure building jobs

Managing director Eric Yong Shang Ming said the group has undergone preliminary qualification exercise for the ECRL packages and expected the results to be announced in the fourth quarter. (Filepic shows Eric Yong with a scale model of the The Greens@Subang west project..)

KUALA LUMPUR: Construction and engineering group Crest Builder Holdings Bhd is eyeing non-infrastructure building contracts such as depots and stations for the East Coast Rail Link (ECRL) in Negri Sembilan and Pahang.

Managing director Eric Yong Shang Ming said the group has undergone preliminary qualification exercise for the ECRL packages and expected the results to be announced in the fourth quarter.

“We hope to tender for ECRL’s building base packages and participate in the transit-oriented development as well,” he said after the company’s AGM.

Meanwhile, Yong said the group is eyeing more construction jobs, given that its Shah Alam property project The Greens is almost fully taken up.

“The construction segment remains our main forte. Our internal target is to secure a total RM600mil worth of construction jobs by year-end.

“In the first half of this year, we have secured RM100mil worth of projects, bringing the construction order book to RM1bil currently,” he said.

In 2018, the group won construction contracts worth around RM625.9mil.

Yong said Crest Builder’s tender book stood at RM2.2bil to RM2.5bil and it has a success rate of 15% to 20%.

For its financial year ending Dec 31, 2019 (FY19), the group expects the construction segment to contribute around 70% to total revenue, with the property development segment contributing the remainder.

In FY18, Crest Builder’s construction and property development segments equally contributed 50% to total revenue. However, more than half of its FY18 bottom line came from property development.

In the next six months, Yong said the group is eyeing high-end residential condominium projects in the Klang Valley as the market is expected to pick up in the second half of this year.

On its property segment, three projects entailing retail, residential and office units with a total gross development value of RM3.43bil have experienced delays in targeted launches due to realignment and rezoning of the projects.

The three deferred projects are Latitude 8 in Dang Wangi, MRB at Jalan Ampang and Kelana Jaya LRT area in Kelana Jaya.

Yong said the targeted launch of the delayed projects is now moved to the next three to four years, adding that it is a “blessing in disguise” due to the challenging property market.

Moving forward, he expects the group’s financial performance in FY19 to be “close enough” to its record FY18 results, which benefited from the completion of it property launches and disposal of Mont Kiara land worth RM34mil.

“FY19 will not be a record year (with regards to net profit) compared to FY18 but it will be close enough to FY18 figures. We are looking at how to drive the construction segment to compensate for the slowdown in the property segment,” Yong noted.

Crest Builder’s net profit doubled to RM70.38mil in FY18 compared with RM28.06mil in FY17.

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