Strong order book to sustain SunCon

Having secured RM462mil in jobs in the first quarter of this year, Maybank Investment Bank Research said SunCon is on track to achieve its RM2bil replenishment target for 2021.

PETALING JAYA: Sunway Construction Group Bhd (SunCon) is optimistic that its strong order book will be able to tide the company over the next two years.

As at December 2020, SunCon’s order book stood at RM5.1bil, according to its chairman Datuk Goh Chye Koon.

“We anticipate the construction sector in Malaysia to remain challenging on the back of the soft economic landscape.

“However, with our strong order book, we can tide over these two years until the economy bounces back with more infrastructure pump priming from the government, ” he said in the company’s 2020 annual report, which was released this week.

Goh said SunCon would continue to look at expanding overseas in the Asean region and India, as well as its in-house bedrock order book from the Sunway group, which has helped to cushion the impact from the pandemic crisis.

“We will also capitalise on the prospects of the growing renewable energy sector in the country, as well as district cooling systems, to further grow our business.

“Operationally, we strive to continue to optimise our productivity with constant improvement in automating and digitalising various processes and continue with our virtual design and construction journey to further improve all aspects of the project life cycle.”

Goh is confident that SunCon could remain resilient in steering through the uncertain and challenging outlook, adding that he is cautiously optimistic of a positive performance in the year ahead.

Having secured RM462mil in jobs in the first quarter of this year, Maybank Investment Bank Research said SunCon is on track to achieve its RM2bil replenishment target for 2021.

“Of the RM462mil wins in the first quarter, RM185mil relates to its precast operations with the orders coming from Singapore and RM180mil relates to a new Sunway Medical Centre at Damansara Giza.

“Our earnings model assumes a similar RM2bil win in 2021. Active tender at hand is RM7bil (50% overseas in India, Singapore and the Philippines).

“Elsewhere, its two Indian projects achieved financial close on May 10,2021, with SunCon awaiting the appointment date.”

SunCon reported a near 24% year-on-year increase in net profit for the first quarter ended March 31,2021.

Higher progress billings under its construction segment and the improved profit margin of its precast segment led to the stronger bottom line of RM20.24mil in the latest quarter.In comparison, SunCon recorded a net profit of RM16.35mil in the same quarter a year earlier.

Revenue in the first quarter of 2021 jumped 24.43% year-on-year to RM455.2mil.

In a filing with Bursa Malaysia on its first quarter earnings performance, SunCon pointed out that its construction segment posted a higher turnover during the quarter, mainly due to higher progress billings from the building division, both in the central and northern regions.

“The corresponding quarter of the preceding financial year was affected by two weeks of total stop in activities during the movement control order, ” the company said in the filing.