Ibraco’s order book grows with Sarawak transport project

PETALING JAYA: Ibraco Bhd’s latest job award from Sarawak Metro Sdn Bhd is viewed positively as this increases the group’s outstanding construction orderbook and supports earnings growth going forward.

Ibraco, part of a consortium that comprises China Railway Engineering Corp Malaysia (CRECM) and Nanyang Tunnel Engineering Sdn Bhd (NYTE), has secured a RM568.6mil construction project for the Kuching Urban Transportation System (KUTS) from Sarawak Metro.

The contract entails the construction and completion of infrastructure for the Blue Line-Package 1, stretching from Rembus to Stutong. Specifically, the job scope includes the construction of a 15km Autonomous Rapid Transit (ART) alignment, starting from the depot in Rembus and along the Kuching-Samarahan Expressway up to Stutong, seven stations and a bridge that will cross the Kuap River.

CRECM is a wholly owned subsidiary of China Railway Group Ltd, a state-owned enterprise in China. NYTE is a wholly owned subsidiary of CRECM. Ibraco, CRECM and NYTE, following the contract award, will establish a joint venture (JV) company dedicated to the project’s implementation.

TA Research said the job award comes as no surprise, given the prior collaboration between Ibraco and Sarawak Metro, which signed a memorandum of understanding on July 18, 2022, outlining their joint efforts in constructing an ART station within Ibraco’s The NorthBank township.

“Furthermore, the management had previously indicated that the group was a registered bidder for the KUTS project. This win marks another significant achievement for Ibraco in Sarawak, following its successful bid for the RM530mil contract to construct a portion of the second trunk road in Samarahan Division on July 31, 2023,” the research house said in a report yesterday.

Ibraco’s outstanding construction orderbook increased from RM992mil to RM1.56bil with the new contract.

“We are optimistic about this contract win because it demonstrates Ibraco’s track record as a key player in Sarawak’s construction sector and its commitment to maximising shareholder returns,” TA Research said.

The research house said Ibraco is still proactively seeking additional building and infrastructure projects from both the public and private sectors, with the current tender book standing at RM500mil.

TA Research maintained a “buy” call for Ibraco with a target price of 68 sen.

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