“We expect our financial performance to improve this year following a decline in earnings in the previous financial year. “The improvement will be largely underpinned by revenue recognition from our RM1.46bil Pan Borneo Highway and the RM606mil Hospital Pakar Kanak-kanak, Universiti Kebangsaan Malaysia projects,” chief executive Syed Muzakir Al Joofre told reporters

KUALA LUMPUR: Construction company Zecon Bhd believes its bottom line for the financial year ending June 30, 2018 (FY18) will improve on the back of the Pan Borneo Highway and a children’s specialist hospital projects.

The company’s chief executive Syed Muzakir Al Joofre said both projects will be the largest contributor to Zecon’s top line in the first quarter of FY18 as well as for the full-year period.

“We expect our financial performance to improve this year following a decline in earnings in the previous financial year.

“The improvement will be largely underpinned by revenue recognition from our RM1.46bil Pan Borneo Highway and the RM606mil Hospital Pakar Kanak-kanak, Universiti Kebangsaan Malaysia projects,” he told reporters.

The company’s full-year revenue was also down by 7.54% y-o-y to RM217mil from RM234.7mil a year earlier.

As at June 30, Kuching-based Zecon’s outstanding order book stood at RM3.6bil. This will sustain the company for the next three to five years.

Zecon corporate finance and accounts vice president Jamil Jamaludin said the company aims to maintain a gross profit margin of approximately 10% in all projects moving forward.

“Given rising costs of labour and raw materials, domestic construction companies are lucky to even have a gross profit margin of 5%. However, we aim to keep our level at 10% for all the projecs that we are currently undertaking,” he said.

Moving forward, Syed Muzakirnoted that property development could be the company’s next growth engine.

Zecon will be developing the Kota Petra mixed development project on a 2,973-acre land, six km from Kuching.

The project, the company’s largest property development by far, has an estimated gross development value of RM11bil that will be carried out over the next 15 years.

The Main Market-listed counter closed nearly 2% lower at 74 sen. A total of 4.66 million shares changed hands.