PETALING JAYA: Ecobuilt Holdings Bhd
has proposed to undertake a diversification of its existing principal business activities to include property development and the trading of building materials.
It is now principally involved in the construction business for general contracting for construction work and related activities.
The construction business has been incurring losses for the company since the financial year 2022 (FY22), it said in a Bursa Malaysia announcement.
"In addition, the construction business has been exposed to credit and collection risks inherent in project-based contracting, which resulted in higher provisions for expected credit losses and bad debt write offs during the financial years/ periods under review. Such factors are largely inherent to the construction industry, which is cyclical in nature and subject to cost volatility, execution risks and counterparty risks," it said.
"The board expects that the new businesses may, once operational, contribute 25% or more of the net profits of the group in the near term, and may result in a diversion of 25% or more of the net assets of the group," it added.
It will have to seek approval from shareholders for this proposed diversification plan at an extraordinary general meeting later.
