KUALA LUMPUR (May 21): Advancecon Holdings Bhd is aiming for a construction order book of RM1 billion in light of ongoing tenders for earthworks and civil engineering works for infrastructure projects in Sabah and Sarawak.

The Selangor-headquartered company said it has substantial manpower and machinery fleet in Sarawak which was currently undertaking earthworks and civil engineering works for the Pan Borneo Highway Sarawak, two roadworks contracts under the Upper Rajang Development Agency, and an iron and steel production complex for Wenan Steel in the Samalaju Industrial Park.

Group chief executive officer Datuk Phum Ang Kia said Advancecon had steadily reinforced its portfolio in undertaking projects to support the infrastructure and development space in Sabah and Sarawak.

“The most recent contract win for Wenan Steel, which is the group’s single-largest earthworks undertaking, indicates the scale of projects and the potential growth there.

“This track record augurs well for our tender prospects in East Malaysia, which accounts for around 60 to 70% of our tender book and includes Pan Borneo Sabah packages,” he said in a statement today.

Phum said along with other ongoing bids for the East Coast Rail Link (ECRL) and Public Works Department projects, Advancecon was optimistic about its prospects and targeted an RM1 billion outstanding order book from RM811.6 million as on March 31, 2021.

Apart from the projects in Sarawak, Advancecon’s order book includes major infrastructure projects of West Coast Expressway, ECRL, as well as property developments including Setia Alamsari and Bandar Bukit Raja 2 in Klang, Selangor.

Meanwhile, Advancecon today announced a lower net profit of RM1.08 million for the first quarter (1Q) ended March 31, 2021, compared with RM2.18 million a year earlier due to the smaller gross profit margin in construction projects during the period as well as lower machinery utilisation.

The group recorded revenue of RM65.08 million in the quarter, down from RM66.32 million in the corresponding quarter of 2020.

Of the revenue, it said RM63.5 million was from the construction and support services segment while the solar energy segment reported revenue of RM1.4 million.

The balance was derived from property investment, it said.

In March this year, Advancecon was selected as one of the successful bidders for the large-scale solar (LSS4) programme by the Energy Commission of Malaysia.

The group will undertake the development of a large-scale solar photovoltaic plant with a generation capacity of 26 megawatts in Kuala Langat, Selangor.

According to Advancecon, commercial operations for the plant are expected to start by 2023.

At the same time, the group recently began power purchase agreements (PPA) with Oon Corp Resources (M) Sdn Bhd after completing solar installations, and is making progress for solar installations on the premises of Prominent Image Sdn Bhd and Jemco Sdn Bhd.

“In 1Q, we recorded a second consecutive quarter of revenue contribution from our solar energy segment.

“Keeping in mind the progress of our PPA and the upcoming works for the LSS4, we expect firmer earnings from this segment going forward,” Phum said.