PETALING JAYA: Ibraco Bhd
’s subsidiary Ibraco Construction Sdn Bhd’s RM529.8mil contract win from Public Works Department (JKR) Sarawak for the construction of a second trunk road is viewed positively by TA Research.
The research house said the secured contract demonstrated Ibraco’s track record as a key player in Sarawak’s construction industry and its commitment to maximising shareholder returns.
“This win comes after a 20-month contract drought and exceeds our financial year 2023 (FY23) order book replenishment assumptions of RM200mil.
“With this new contract, Ibraco’s outstanding construction order book has substantially increased from RM242.1mil as of March 31, 2023 to RM763.2mil as of July 31, 2023 (excluding the Muara Tuang Land contract),” the research house said in a report yesterday.
With a duration of 42 months, from Aug 8, 2023 to Feb 7, 2027, package A1-A entails the building of the new Batang Samarahan Bridge and a nine-kms new four-lane dual carriageway road per the JKR R5 standard from Batang Samarahan to Batang Sadong in the Samarahan division.
“Despite holding a record order book, we understand that Ibraco’s management remains proactive in seeking additional building and infrastructure projects from both the public and private sectors, with the current tender book standing at RM500mil.
“This commitment further strengthens the group’s growth prospects,” the research house said.
TA Research expects the new contract to improve the group’s net earnings by RM31.8mil or an earnings per share of 5.8 sen throughout the contract period.
“Consequent to this contract, we raised our FY23 order book replenishment assumptions to RM530mil and increased FY23 to FY25 earnings by 3% to 9%,” the research house said.
Going forward, TA Research said the construction sector in Sabah and Sarawak, particularly in Sarawak, is expected to gain momentum.
The research house expects an increase in development expenditure allocated to Sarawak, given the role of Gabungan Parti Sarawak in the current unity government.
