KUALA LUMPUR (June 9): With its initial order backlog target of RM1.2 billion on track to be met, Kerjaya Prospek Group Bhd has increased its order backlog target for the fiscal year ending 31 December 2022 (FY22) to match the RM1 of its FY19 .5 billion.
During a press conference following a signing ceremony for a framework agreement with Samsung C&T (KL) Sdn Bhd held on Thursday June 9, Managing Director and Executive Director of Kerjaya Prospek, Tee Eng Tiong, said the group had reached RM1.17 billion per year. to date, its target has been adjusted upwards to RM1.5 billion.
“I think it’s quite cautious because we don’t know what will happen in the market in the future. But we are very optimistic that the market will recover now, so the implementation [the target at] RM1.5 billion is actually quite conservative,” said Eng Tiong.
Building on that momentum, Kerjaya Prospek non-executive chairman Tee Eng Ho noted that the construction market could return to pre-pandemic or “normal” levels in 2023.
“The way I see the construction market in Malaysia, slowly there are a lot of high-rise building launches coming out maybe in the second half of this year or the last quarter of this year. So the next year will definitely be much better than this year,” he said.
In order to offset rising commodity prices, Eng Ho said property prices needed to rise 10% year-on-year and the affordability issue in the housing market – induced by the impact of the Covid-19 pandemic – will self-adjust in 2H2022 or 2023.
Kerjaya Prospek’s unit, Kerjaya Prospek (M) Sdn Bhd, has signed a five-year framework agreement with Samsung C&T – a wholly owned subsidiary of engineering and construction company Samsung C&T Corp – to jointly pursue various types of business opportunities for construction contracts exceeding RM300 million.
“This agreement allows both parties to embark on a long-term strategic alliance that is expected to accelerate the growth of both companies in the construction sector in Malaysia.
“The partnership strategically aligns the two companies for the long term by combining Kerjaya’s strengths in high-rise constructions with Samsung C&T’s expertise in complex and sophisticated buildings.
“Most importantly, the partnership builds on the respective merits of Kerjaya and Samsung C&T to create a compelling value proposition for both parties, their customers and their shareholders,” the group said in a statement Thursday.
Kerjaya Prospek noted that the agreement will automatically renew on a rolling basis after expiration for subsequent one-year periods until the agreement is terminated by either party.
To illustrate its commitment to the collaboration, Samsung C&T, through its wholly owned subsidiary Vista Contracting & Investment Global Pte Ltd, will subscribe to all of the 25.24 million new shares of Kerjaya Prospek — 2.04% of existing share capital of the group — in the framework of the private operation proposed by the latter. placement.
At RM1.60 sen each, Kerjaya Prospek said he expects to raise RM40.38 million in revenue for the financial year, of which RM39.82 million will be used as working capital for ongoing projects , while the remaining RM558,000 will be for the estimated expenditure of the financial year.
Shares of Kerjaya Prospek ended down four sen or 3.31% at RM1.17, giving the group a market capitalization of RM1.45 billion.