SCIB sees tough time ahead for construction business

Manufacturing segment suffered a loss before tax of RM1.8m, while property trading segment booked no revenue contribution in the quarter


SARAWAK Consolidated Industries Bhd (SCIB) posted a net profit of RM12.2 million for the quarter between January and March this year.

Profit before tax (PBT) stood at RM14.3 million compared to RM33.7 million in the immediate preceding quarter.

The concrete pipe manufacturer recorded a revenue of RM175.3 million for the three months compared to RM185.6 million in the immediate preceding quarter.

“The higher PBT in the preceding quarter was mainly due to recognition of a fair value gain on profit guarantee receivable of RM17.7 million,” SCIB said in an exchange filing yesterday.

The group changed its financial year ending from Dec 31, 2020, to June 30, 2021. As such, no comparative figures were presented with any comparative period previously reported.

SCIB said its manufacturing segment suffered a loss before tax of RM1.8 million due to reduced demand for concrete products as a result of project delays due to the Covid-19 pandemic.

Its property trading segment booked no revenue contribution for the quarter under review due to the economic slowdown in the property market.

Meanwhile, its construction and engineering, procurement, construction and commissioning (EPCC) division contributed RM155.7 million in revenue and RM16.1 million in profit, mainly by the EPCC division in the Middle East countries such as Oman and Qatar.

SCIB foresees challenges in the construction landscape on strict standard operating procedures, supply chain disruption, project progress deferment, rising raw material prices, and additional safety and welfare costs.

“We noted that there are still opportunities in public and private initiated projects with construction acting as a base to meet the public needs and propel a country’s development, yet this will be moving at a slow pace as the utmost priority is to contain the alarming pandemic infection,” the company said.

SCIB is optimising its resources and strategising the counteractions amid the challenging backdrop.

The company said it is in talks with customers and suppliers to discuss the site progress planning and rescheduling if required.

Its orderbook value on hand stood at RM2.4 billion as the contracts announced in its first quarter of 2021, which could be translated into earnings for the company’s current financial year and up to 2030.

In another filing, SCIB announced that its director and substantial shareholder, Datuk Dr Mohd Abdul Karim Abdullah has disposed of over 2.91 million warrants in the open market.

Mohd Abdul Karim (picture), who is also the MD and CEO of Serba Dinamik Holdings Bhd, holds a 13.6% stake in SCIB with over 33 million shares.

Meanwhile, SCIB director Datu Mohidin Ishak has acquired 8,000 new securities in the open market.

The company’s shares and KPower Bhd’s are believed to have been dragged down by the Serba Dinamik audit matters.

SCIB shares have slumped 56.5% since early this month as investors felt unease with the development at Serba Dinamik.

The counter closed 22.9% lower yesterday to 46 sen yesterday, valuing the company RM223.23 million.