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For the current quarter and current period to date under review, the Group recorded revenue of RM53.8 million and RM142.9 million respectively.
Engineering design revenue increased substantially by RM3.8 million and RM18.6 million for the current quarter and current period ended 30 September 2018 respectively as compared to the corresponding quarter and period in previous year. This is attributable to the major on-going projects which includes Proposed Tun Razak Exchange (TRX) External Roads and West Coast Expressway and design services rendered for East Coast Rail Line (“ECRL”) detailed design and preliminary design up to the date of suspension notice, have contributed to the major proportion of engineering design revenue. However, this was compensated by the completion or work progress of few projects including ECRL scheme design, Temporary Common Camp Facilities and Infrastructure for Refinery and Petrochemicals Integrated Development (“RAPID”) Project and External Infrastructure Works for BBCC.
In addition, our newly acquired subsidiary, SMHB Engineering Sdn Bhd who started to contribute revenue to our Group post acquisition has led to an increase in engineering design revenue by RM13.3 million.
Our major on-going supervision projects including Maju Expressway Extension To KLIA, Sungei Besi-Ulu Kelang Elevated Expressway and West Coast Expressway which are progressing well in line with the construction stage of these projects continued to contribute majority of the supervision revenue during current period and quarter ended 30 September 2018. However, this was offsetted by completed project, i.e. LRT Ampang Line Extension and Kuantan Port Expansion in line with their completion status.
In addition, our newly acquired subsidiary, SMHB Engineering Sdn Bhd who started to contribute revenue to our Group post acquisition has led to a substantial increase in construction supervision revenue by RM26.4 million.
The revenue from project management for both current period and quarter decreased as compared to the same corresponding periods in previous year. This is in line with the progress of the on-going project management projects which include MRT Line 2 –Jajaran Sg. Buloh-Serdang-Putrajaya and MRT Line 1- Jajaran Sg. Buloh-Kajang. However, this is offset by new project Taman Perling Mixed Used Development which is progressing as per schedule.
BIM services accounted for small proportion of the Group’s revenue. The reduction in revenue for both current period and quarter was mainly due to the completion of certain BIM projects.
Reimbursable income is recognised on a back to back basis with sub-consultant and allowances claimed by supervision staff and therefore it has no significant impact on the financial performance of the Group regardless of the decline or rise in reimbursable income.
Local market continued to contribute significant portion of revenue amounting to 98.0% of the Group’s total revenue. The higher revenue posted by Malaysia segment was attributed to local projects explained in section (a) above.
3 months ended 30 September 2018
PAT for current quarter ended 30 September 2018 grew substantially by RM6.30 million or 221.4% is mainly attributable to newly acquired subsidiary, i.e. SMHB Engineering Sdn Bhd who contributed RM4.77 million in current quarter post acquisition apart from higher PAT contributed by existing subsidiary, HSS Engineering Sdn Bhd. However, this is compensated by higher interest expense by RM1.67 million mainly arising from the term loan of RM85 million to part finance the acquisition of SMHB Engineering Sdn Bhd.
9 months ended 30 September 2018
PAT for current period ended 30 September 2018 increased by RM7.95 million or 88.6% is mainly attributable to newly acquired subsidiary, i.e. SMHB Engineering Sdn Bhd who contributed RM8.13 million in current period post acquisition apart from higher PAT contributed by existing subsidiary, HSS Engineering Sdn Bhd. However, this is compensated by higher interest expense by RM3.41 million mainly arising from the term loan of RM85 million to part finance the acquisition of SMHB Engineering Sdn Bhd and one-off expenses totalling RM2.58 million incurred for our multiple corporate exercises for the acquisition of SMHB Engineering Sdn Bhd which were completed in March 2018.
The above unbilled order book will be billed progressively on average over the next two (2) to five (5) years.
Premised on the aforesaid plans (i) and (iii), the Group expects reasonable performance in the financial year 2018 given the existing unbilled order book balance of RM588.6 million which will provide visibility in earnings for the next 2-3 years.
Despite of the current business environment and barring any unforeseen circumstances, the Board of Directors of the Company is of the opinion that the prospects for the remaining period to the end of the financial year ending 31 December 2018 will remain challenging.