WCT bullish on construction sector

KUALA LUMPUR: WCT Holdings Bhd (WCT) has bid for tenders worth RM5bil comprising local civil and infrastructure as well as building works for this year.

It is no surprise that the construction sector is in the limelight with the potential revival of mega infrastructure projects as well as the government’s plan to pump-prime the economy.

Group managing director Datuk Lee Tuck Fook said WCT is confident of securing two to three projects that it has tendered for.

“Based on our internal assessment as well as our 40 years of expertise and proven track record in a wide range of engineering and construction jobs, the group is confident of securing some of the projects.

“Project bidding and tendering is part of our core business. As of now, we are working on the tenders of a good mix of local civil and infrastructure as well as building works,” he told StarBiz.

Meanwhile, he said the group aims to pursue new opportunities for engineering and construction jobs to replenish its order book.

Since the beginning of this year, WCT has bagged new contracts which has strengthened its outstanding order book to around RM5.17bil as of March 31, 2021.

Earlier this year, WCT’s engineering and construction division won a contract worth RM136.7mil to undertake superstructure works for a 29-storey hotel and 13-storey office building at The Exchange TRX.

The group also won the main contract for the proposed extension and upgrading of the Sultan Ismail Petra Airport in Kelantan worth RM440.4mil.

In the first quarter ended March 31, 2021, the group returned to the black after slipping into a net loss of RM227.67mil in the preceding quarter due to business disruptions caused by the Covid-19 pandemic.

In the quarter, WCT posted a net profit of RM65.4mil, mainly attributed to the stable performance of its engineering and construction division.

The division contributed around 52% or RM231mil to the group’s overall revenue, while its operating profit surged to RM57mil from RM7mil in the corresponding quarter a year ago.

“The higher operating profit in the first quarter was primarily due to a RM48mil reversal as a result of lower final settlement of an arbitral award,” Lee said.

Moreover, WCT’s property development division posted higher revenue and operating profit of RM177mil and RM77mil, respectively, in the quarter.

“Above all, the latest results reflect the group’s resilience amidst the Covid-19 pandemic. It is very important to stay resilient, especially during these trying times,” he added.

Amidst the pandemic, Lee said the group is looking to divest its non-core vacant land to improve cashflow.

In the long run, he said the group is banking on its engineering and construction division to execute projects to preserve its revenue stream.

On WCT’s property development division, Lee said the group would continue to reduce unsold properties through aggressive marketing and pricing strategies, as well as by leveraging on new technologies to drive sales.

On the group’s retail mall division, he said the team is churning out innovative and effective initiatives to boost sales and footfall in the malls.

Lee said the higher steel prices would mainly affect the group’s engineering and construction division’s building projects.

However, he said the higher steel prices is still manageable for the group as the price hike has been taken into consideration in its projects’ costing.

“In addition, the cost of steel mainly comprises 6% to 7% of the total building projects’ cost and 2% of highway projects’ cost. This is manageable for WCT,” Lee noted.

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