Eversendai sees ‘greater year’ in 2021

by NUR HANANI AZMAN/ pic by RAZAK GHAZALI

EVERSENDAI Corp Bhd expects its fortunes to be lifted starting from the third quarter this year, as it resumes projects which were put on hold due to movement restrictions which started in March.

Construction works in countries where the structural steel specialist operates have now restarted, Eversendai executive chairman and group MD Tan Sri AK Nathan (picture) said.

“This pandemic period is challenging for all of us. However, we are in a very comfortable position because we have projects in hand which need to be executed.

“To me, I feel we cannot look at great numbers for 2020, but hopefully 2021 will be a greater year,” he told The Malaysian Reserve.

Eversendai fell into the red in the fourth quarter ended Dec 31, 2019 (4Q19), with a net loss of RM7.28 million versus a net profit of RM19.74 million the year prior due to losses of RM49.5 million sustained by its energy business.

Full-year net profit came in at RM13.7 million, 80.5% lower than RM70.24 million a year earlier. Its 2019 revenue fell 8.8% to RM1.56 billion from RM1.71 billion in 2018.

Going into 2020, the group has approximately RM10 billion worth of tendered and prospective projects.

It bagged 14 new projects worth RM1.33 billion earlier this year in Malaysia, India, Qatar, Saudi Arabia, Morocco, the Netherlands and the UK.

As at June 1, 2020, the firm had an orderbook of circa RM2.88 billion versus some RM2.5 billion a year ago.

The group is present in the Middle East, Malaysia, Singapore, India and now North Africa after securing a 55-storey luxurious tower project in Morocco.

It’s continuously looking at delving into new opportunities in interrelated industries, although structural steel works continue to be its dominant business segment.

Structural steel works contribute about 97.2% to overall revenue, with 57.7% coming from the Middle East, 24% from Malaysia and Singapore, and 15.1% from India.

The remaining 2.8% of revenue comes from energy operations in the Middle East. There is no intention to privatise operations in the Middle East, Nathan added.

In fact, rather than venturing into new countries, Nathan is currently “seriously looking” at operations in one of the countries which aren’t doing well, with the possibility of exiting the market.

“We want to focus more on merging with Vahana Offshore (M) Sdn Bhd, which is the liftboat unit of Eversendai’s parent, Vahana Holdings Sdn Bhd,” he said.

“This move is expected to spike up Eversendai’s bottom line by about 20% to 25%. We are currently waiting for approval and expecting the merger to be completed by September this year.”

In February, Vahana Holdings — Nathan’s private vehicle — offered to sell Vahana Offshore to Eversendai, a move, it said, would give the latter liftboat assets together with secured long-term charter oil and gas contracts.

Eversendai agreed, stating in a March bourse filing that it would acquire the entire issued capital of Vahana Offshore from Vahana Holdings.

“It’s a win-win situation,” Nathan said. “Vahana Offshore’s business is recurring income that will positively boost Eversendai’s income.”

The group is also banking on the offshore wind renewable-energy (RE) sector as a sustainable business stream going forward.

“Our recent venture into the RE sector saw us handling our first-ever European offshore wind RE project intended for Holland’s transmission system operator, TenneT.

“We are very excited about the significant and positive progress made, especially on the new venture as it further provides testament to our diversification strategy,” Nathan added.