Malaysia’s SunCon’s Q2 Earnings Down, Keeps RM2bil As New Target

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Sunway Construction Group Bhd’s (SunCon) net profit slipped 93.4 per cent to RM2.19 million in the second quarter (Q2) ended Jun 30, 2020 from RM33.19 million a year ago.

In its filing with Bursa Malaysia today, SunCon said its revenue dropped 68.2 per cent to RM140.2 million compared to RM440.2 million revenue in the same quarter last year.

“The decrease was due to both construction and precast segments,” it added.

According to SunCon, the construction segment reported revenue of RM137.2 million compared to RM406.3 million revenue previously.

This was due to the impact of 2.5 months of movement control order (MCO) and conditional MCO that was effective from March 18 to June 9 this year.

“Despite construction being able to initiate work earlier, we were hampered by inability of the test lab to cope with the amount of testing as it was compulsory to have all our foreign workers including our business partners’ tested and confirmed negative for Covid-19 before commencing.

“Full site operations were only restated in early June 2020. Despite the decline in turnover, this segment managed to reduce its fixed overheads to maintain a profit making position,” it said.

SunCon has proposed a first interim dividend of 1.25 sen per share for the year ending December 31, 2020.

Managing director Chung Soo Kiong said the group had retained its RM2 billion of new orders target this year.

Chung said SunCon would be able to realise the target as it had RM8.5 billion worth of active new tenders.

“Our active tenders include projects in Malaysia, India, Singapore and the Philippines,” he said.

Chung said the group would continue to expand overseas and take on in-house pipeline projects by Sunway Group for a sustained growth.

SunCon is also looking into the renewable energy sector with a focus on solar projects and district cooling systems.

To date, all of SunCon’s sites in Malaysia have resumed its operations.

“We will continue to practice stringent precautionary measures in compliance to the guidelines by the Ministry of Health.

“Barring any further unforeseen circumstances, we hope to be able to minimise construction delays due to non-work activity of more than 2.5 months during the MCO and CMCO period, and to recover project progress.

“With the group’s strong cash reserve and stringent cost control measures, we are optimistic of overcoming this difficult period,” he added.

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