Bina Puri Confident About Bagging RM1b Worth of Jobs
KUALA LUMPUR: Bina Puri Holdings Bhd is confident about securing RM1 billion worth of construction and infrastructure jobs in the next six to nine months, its group executive director Datuk Matthew Tee Kai Woon said.
The group has been securing projects in excess of RM1 billion on a yearly basis.
Currently the group has ongoing projects worth RM2.3 billion and an outstanding order book of RM1.18 billion, which will give it earnings visibility over the next three to four years. Of the outstanding order book, 69% are government-related and the remaining 31% are privately owned projects.
Tee said Bina Puri's tender book stands at RM1.5 billion, which include potential jobs such as the Sabah portion of the 1,663km Pan-Borneo Highway, flood mitigation projects and upcoming developments within the Klang Valley like the Tun Razak Exchange and Menara Warisan Merdeka.
"The Sarawak portion of the Pan Borneo [Highway] has been dished out, but very little has been heard of the Sabah portion. We are positive about the upcoming development" he told a media briefing yesterday.
Tee said Bina Puri has also submitted bids to build large-scale solar power plant projects in Sabah and Melaka, with total capacity of around 10MW each.
"We are waiting for the results from the authorities, which are expected to be released in the next month or so" he added.
Still, Tee said Bina Puri prefers to be aggressive in power generation via mini-hydro projects as it is more predictable.
"We are planning to add more hydropower projects to our stable. We have identified close to 15 suitable locations within Malaysia and Indonesia" he said, guiding that the cost to build a 4MW mini-hydro plant hovers at around US$13 million (RM54.34 million).
Tee also said the group is unlikely to pay dividends for the financial year ending Dec 31, 2017 (FY17) as it reserves its capital to fund ongoing projects.
"Subject to our performance, we may start dishing out dividends, which is more likely to be in FY19 than in FY18" he added. Bina Puri last rewarded its shareholders in FY15.
Mindful of its debt levels which stood at RM619 million as at mid-October, Tee said "the road ahead for Bina Puri is to pare the gearing down as we no longer have a comfortable room to increase our leverage on bank borrowingsâ€.
"Our gearing is at around three times, and the optimal gearing level for construction firms typically hovers at around 1.5 times" he added.
Bina Puri had on Nov 13 proposed to raise up to RM9.34 million via a private placement to support its ongoing construction and property development projects.
On the property front, Tee said Bina Puri has an unbilled sales of RM400 million which will be progressively recognised from the next financial quarter.
Bina Puri group chief financial officer David Lee said it has booked property sales of some RM40 million and expects the full-year sales to surpass the RM100 million mark.
Currently, Bina Puri is developing four property projects worth RM3.16 billion in gross development value (GDV) across Kuala Lumpur and Sabah.
"Future developments and launches are slated to be worth RM2.8 billion in GDV, which will keep us busy over the next four years" said Tee.
Tee also said the group remains hopeful of securing the bus rapid transit (BRT) system projects in Kota Kinabalu, Sabah and the Klang Valley, which have been delayed since they were announced two years ago. "I am not in the position to say whether the projects have been approved or not. Clearly, the projects have rolled over year after year, but we are still confident about being the top contenders for the Sabah BRT project.â€
Bina Puri has reportedly submitted a proposal to build the BRT systems, each of which is said to cost around RM1 billion.
SIGN UP NEWSLETTER