PETALING JAYA: Construction companies will continue to maintain prudent cost controls to improve their financial position as they navigate the year ahead, in anticipation of positive economic growth.
Bina Puri Holdings Bhd
chairman Datuk Amar Jaul Anak Samion believes that growth will continue to be supported by domestic demand amid improving inflation rates, unemployment rate and income.
Additionally, he said the contribution of the tourism-related sectors is expected to improve, following throngs of tourists visiting Malaysia post-pandemic.
“The economy will require several mega projects to kickstart the recovery of the construction industry, which in turn has multiplier effects throughout the economy,” he said in the group’s annual report.
“The group continues to implement various measures, namely prudent cost control, monetise low-performing assets to mitigate risks associated with financial, labour cost and material price escalation in order to maintain financial and operations stability of our businesses.”
Amar added that the group will also be actively sourcing for new business opportunities to strengthen its recurring revenue stream.
Meanwhile, Ahmad Zaki Resources Bhd (AZRB) chairman Tan Sri Dr Madinah Mohamad said the group will continue to practise prudent financial management and will rigorously manage its resources to ensure it continues to remain resilient.
“An improving financial position and a more balanced risk profile will unshackle the group from past constraints to capitalise on growth opportunities and weather economic fluctuations.
“In addition, we are exploring potential strategic partnerships and collaborations to expand our project portfolio as a confident step towards the future,” she said in AZRB’s annual report.
Madinah also expects that the extended period of losses at AZRB “may be nearing an end” with the imminent completion of a major tolled section of the East Klang Valley Expressway (EKVE), as well as restructuring of its loss-making plantation operations.
“While the completion of the EKVE project will get us back on track and provide a recurring source of income, streamlining non-core assets will eventually reduce losses to a significant degree.”
Meanwhile, Gamuda Bhd group chief financial officer Soo Kok Wong anticipates next year’s performance for the group to be driven by overseas construction activities, as projects in Australia and Taiwan continue to pick up pace.
He also believes the full year contribution of the newly acquired Australian transport projects business of Downer Transports Projects (acquired on June 20, 2023) and property sales (including higher contribution from newly launched quick-turnaround projects of the property division) to boost earnings.
“Moving forward, the resilience of the group is underpinned by a large construction order book of RM25bil and unbilled property sales of RM6.7bil,” Soo said in the company’s annual report.
“On top of that, the group has a healthy balance sheet with a comfortable net gearing of 25%, well below our self-imposed gearing limit of 70%.”
As the economy regains its momentum and construction projects resume post-pandemic, Malayan Cement Bhd managing director Datuk Seri Michael Yeoh said the group is in a good position to capitalise on growing demand.
“Cement demand from property-related construction is expected to continue to improve, supported by the development of commercial, industrial and infrastructure projects.
“Moderating factors including inflation and higher interest rates may impact domestic economic sentiment, with a knock-on effect on cement demand,” he said in the group’s annual report.
Yeoh added that the company’s strategic approach continues to prioritise operational efficiency and sustainability, including plans for more waste heat recovery facilities and solar panels, pending regulatory approvals.
“Our investment in research and development is intensifying, particularly around low-carbon solutions.
“We remain committed to knowledge-sharing and are looking at industry-wide development expansively,” he said.
