Serba Dinamik eyes 10%-15% growth in FY20 earnings, revenue

By SHAHEERA AZNAM SHAH / Pic TMR

SERBA Dinamik Holdings Bhd is aiming to grow its earnings and revenue by between 10% and 15% in the financial year ending Dec 31, 2020 (FY20), backed largely by overseas projects within its strong orderbook.

Its group MD and CEO Datuk Mohd Abdul Karim Abdullah (picture) said the bulk of FY20 revenue will be derived from its projects in Qatar, Saudi Arabia and the United Arab Emirates (UAE).

“In terms of growth in the top and bottom lines, we are looking at 10% to 15% growth compared to the previous year,” he said at a press conference conducted online yesterday.

Presently, of the group’s RM17 billion orderbook for engineering, procurement, construction and commissioning (EPCC) contracts, 45% is derived from the oil and gas (O&G) sector and the remaining from the non-O&G sectors.

“We are ramping up the EPCC in a big way this year and we believe it will contribute quite a reasonable amount to our total revenue,” Mohd Abdul Karim added.

Nearly all the group’s projects are “back in full swing” after being halted during the Movement Control Order (MCO), he said.

Malaysia began reopening certain sectors under the Conditional MCO last Monday.

The group’s operation and maintenance (O&M) contracts, which are mainly related to the O&G sector, have also remained active despite the volatility in oil prices.

“O&M has always been our core competency and the contracts in Malaysia and other countries are still active in nature, and we are still putting in inventory invoices related to different respective contracts,” he said.

Crude oil prices plummeted to new lows in recent months due to waning demand as countries worldwide implemented lockdowns to curb the spread of the Covid-19 pandemic, leading to oversupply coupled with storage concerns.

Yet, Mohd Abdul Karim said the group’s production platform is still running and “our contracts are still being honoured”.

The engineering services and solutions firm has also been working on reducing dependency on O&G revenue for three years now.

It expects to narrow the revenue contribution of the O&G sector to total group revenue to 30% from the current 75%.

To achieve this, the group will concentrate on O&M as well as EPCC contracts in other sectors besides O&G.

“There are several contracts that we are currently pursuing which are not categorised as O&G projects, such as the development of chloro-alkali plant and innovation hub.

“The projects have successfully been recognised in the UAE and we are trying to develop them in other countries,” Mohd Abdul Karim said.

Last month, the company said it bagged a US$1.78 billion (RM7.71 billion) contract to undertake the EPCC of an innovation hub, academic campus, related facilities and IT infrastructure in Abu Dhabi, UAE.

The group then embarked on a private placement exercise, raising RM456.7 million for working capital and to repay some borrowings.

This came after a batch of contract wins announced in February this year, comprising 12 new local and overseas projects.

Shares of Serba Dinamik closed 0.63% or one sen lower at RM1.57 yesterday, giving it a market capitalisation of RM5.29 billion.