Friday, November 24, 2006

Road Builder terminates RM112m Kerala project

Road Builder (M) Holdings Bhd has terminated the RM112.4 million contract for the Kerala State Transport Project, Phase One after the Kerala State Government failed to make payments.

The company said on Nov 24 the termination was due to the continued failure on the part of the Kerala government to make the payment. As at Oct 31, 2006, it had completed some 63% of the construction works.

It issued a notice of termination on Nov 22 and in accordance with the contract, the termination will take effect 14 days after the notice date.

Road Builder said it would be claiming for all damages and losses arising from the default of the payment.

In a separate statement, Road Builder's net profit for the first quarter ended Sept 30, 2006 rose 19% to RM22.64 million from RM19 million a year earlier, mainly due to the recognition of profit margin from on-going projects and those nearing completion, as well as gains from disposal of property.

However, the increase was partially offset by the higher finance cost incurred and the provision of staff cost in the quarter.

Its revenue declined 12% to RM241.4 million from RM273.9 million as the completion of several projects by its property and construction divisions resulted in lower revenue.

Earnings per share was 4.35 sen against 3.65 previously.

Revenue from its toll division increased 10% to RM28.3 million from RM25.7 million mainly due to higher traffic volumes. Operating profit before finance and tax increased by 14% to RM20.7 million from RM18.2 million.

Road Builder said that although revenue from its construction division fell 25% to RM104.5 million, its operating profit before finance cost and tax increased by 81% to RM20.2 million from RM11.2 million a year ago.

Operating profit before finance cost and tax for its port operations increased by 20% to RM9.4 million from RM7.8 million while revenue saw a 6% improvement to RM23.8 million from RM25.2 million during the period under review.

The property division’s operating profit before finance cost and tax increased by 9% to RM18.7 million from RM17.1 million despite a marginal fall in revenue to RM81.8 million from RM83.9 million.


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