Sarawak Cable to get results from transmission line contracts in 4Q13

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  • Tuesday, 03 Sep 2013

KUCHING: Sarawak Cable Bhd is expected to begin seeing contributions from its recently secured RM620mil transmission line packages in the fourth quarter of this year.

On Friday, the company in its filing to Bursa Malaysia announced that its wholly-owned subsidiary Trenergy Infrastructure with joint-venture partner Sinohydro Corp received a letter of intent (LOI) from Sarawak Energy Bhd with regard to the award of two packages, comprising the Mapai-Lachau line worth RM353mil and Lachau-Tondong line (RM266mil), from the total 500kV line.

Commencement of works for both packages is Oct 1, with completion period of 23 months and 26 months, respectively.

AmResearch Sdn Bhd said the news confirmed its previous reports that the 500kV line, of which packages were now valued at RM1.2bil, was expected to be awarded by August or this month.

“Together with the 132kV Tudan-Miri airport job it secured in June, Sarawak Cable has won a total of RM650mil new transmission deals this year.

“We have an order book assumption of RM1bil for financial year 2013,” the research house reported yesterday.

“Looking forward, two more projects that could be awarded in the near term include the Tanjung Manis-Bintulu and Mambong-Kalimantan lines worth some RM400mil. On Sarawak Cable, we maintain a ‘BUY’ call with a sum-of-parts-derived fair value of RM2.33 share.”

However, the company failed to excite equity investors amidst the news of it going to bag these major contracts.

Its shares lost seven sen to RM1.78 on volume of more than 1.8 million shares yesterday. The stock earlier rose to intra-day high of RM1.92 but the gains fizzled out fast.

A strong rally took Sarawak Cable to a high of RM2.28 on Aug 19 on news reports that the company was the front-runner to win the 500Kv transmission line project.

The two packages attained by Sarawak Cable were part of six awarded last Friday. Other successful bidders were Toshiba Transmission and Distribution System Asia Sdn Bhd-Xian Electric Engineering for the Samalaju-Mapai and Mapai-Oya lines; KEC International Ltd (Mambong-Entiggan substation extension); and Pestech Sdn Bhd (Mapai substation project).

Moreover it was also reported last week that the Indonesian government and Asian Development Bank (ADB) were moving forward with plans to build a cross-border transmission line linking Sarawak and West Kalimantan.

ADB said the project would build a 145km distribution line within West Kalimantan, and another 83km cross-border line connecting the Indonesian Borneo province and Sarawak.

It is believed that ADB has secured a US$100mil loan for the Kalimantan side and is now preparing a second loan to finance the project for the Malaysian side.

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