Nestcon secures RM130mil job in Sarawak

KUALA LUMPUR: Nestcon Bhd has secured a letter of award (LoA) worth RM129.6mil from Sino Natural Resources Malaysia Sdn Bhd (Sino) for construction work in Sarawak.

In a filing with Bursa Malaysia yesterday, the civil engineering and infrastructure firm said its wholly-owned subsidiary, Nestcon Infra Sdn Bhd (NISB), had secured a contract to provide site clearance, earthwork and ancillary works on CBS 2, Block 3, Sungai Bakau, Balingian, Mukah Division, Sarawak.

“The LoA shall be in force for an initial term of 24 months effective from Oct 13, 2022 to Oct 12, 2024, with an option to extend for an additional period of 24 months upon written notice not later than thirty days prior to the expiration of the initial term.

“NISB shall carry the project in accordance with the specifications and requirements set out in the LoA.”

Nestcon said Sino and NISB will enter into a formal contract along with the necessary supporting documents within 21 days from the acknowledgement of the LoA.

“The LoA is a binding agreement between Sino and NISB before the execution of the contract and shall remain in full force and effect and shall be read and construed and be enforceable.”

The acceptance of the LoA by NISB to undertake the project is expected to contribute positively to the net assets per share, earnings per share and gearing of Nestcon for the financial year ending Dec 31, 2022 and throughout the duration of the project.

“The company does not foresee any exceptional risk other than the normal operational risks associated with the LoA and/or project.

“Nevertheless, the company will take the necessary steps to mitigate the risks as and when they occur,” said Nestcon.

For its second quarter ended June 30, 2022, Nestcon’s net profit grew to RM2.77mil from RM1.01mil in the previous corresponding period, while revenue rose to RM105.11mil from RM84.77mil a year earlier.

In a filing with the local bourse following the announcement of its second quarter financial results, Nestcon said the operating environment is expected to remain highly competitive this year.