The company said the project is expected to contribute positively to the earnings of SunCon group for the financial year ending Dec 31, 2023 onwards.
PETALING JAYA: Sunway Construction Group Bhd
(SunCon) has secured a letter of acceptance to jointly develop Daiso’s global distribution centre (GDC) warehouse in Port Klang, Selangor, for RM595.38mil.
In a filing with Bursa Malaysia, SunCon said a 50:50 joint venture comprising its wholly-owned subsidiary, Sunway Construction Sdn Bhd (SCSB) and Kajima (M) Sdn Bhd had signed a letter of acceptance issued by Daiso Malaysia Group Sdn Bhd in respect of the proposed design and construction of the GDC.
“The project is for a period of 34.5 months and is expected to be completed by the second quarter of 2026 (2Q26),” it said.
SunCon added that the project is not expected to have any immediate material effect on its earnings per share, net assets per share and gearing of SunCon for the financial year ending Dec 31, 2023.
“However, barring any unforeseen circumstances, the project is expected to contribute positively to the earnings of SunCon group for the financial year ending Dec 31, 2023 onwards.”
Meanwhile, Bernama reported that Daiso will be investing RM1bil to build its GDC. The GDC will be Daiso’s second international hub after China.
Daiso offers household items such as kitchenware and cleaning products.
Daiso Malaysia Group Sdn Bhd chairman Tan Sri Khairul Adib Abd Rahman said the GDC will function as a global distribution hub for Daiso to launch logistics operations for the entry of Daiso’s products from Japan and China, including distribution to 22 countries in Asia and the Middle East.
He said the GDC, with an area of 130,000 sq feet, is expected to commence development in May 2024 and be completed in May 2026.
“It is scheduled to be operational in January 2027,” Bernama reported.
Meanwhile, in a separate announcement, SunCon said that SCSB had accepted a letter of intent from K2 Strategic Infrastructure Malaysia Sdn Bhd in respect of a proposed development of a data centre in Johor, for RM190mil.
“The project is for a period of approximately 14 months and is expected to be completed in phases with the final phase to be completed by 4Q24. Total new projects secured by SunCon group this year amounted to RM2.2bil,” it said.
For 2Q23, the group recorded a net profit rise of 2.2% year-on-year (y-o-y) to RM33mil, on the back of an 8.2% growth in revenue to RM604mil.
In a filing with Bursa Malaysia on its earnings, SunCon said that while turnover for both the construction and precast segments had increased, profitability saw a decline in its construction segment.
Cumulatively, for the first half of 2023, the company’s earnings declined by 9% y-o-y to RM60.8mil as revenue inched lower by 4.8% y-o-y to RM1.12bil due to a pullback in its construction segment.
SunCon said the higher turnover for the first half of last year was largely due to the expedited construction progress to ensure the completion of projects in the central and northern regions of the country.
