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Thursday, September 3, 2020

Advancecon bags two ECRL jobs worth RM80.8m

Wong Ee Lin/theedgemarkets.com
September 02, 2020 19:24 pm +08

KUALA LUMPUR (Sept 2): Advancecon Holdings Bhd has bagged two subcontracts worth a collective RM80.8 million for works relating to the East Coast Rail Link (ECRL) project from China Communications Construction (ECRL) Sdn Bhd.

According to filings with the local stock exchange today, its wholly-owned subsidiary Advancecon Infra Sdn Bhd (AISB) accepted two letters of award as the subcontractor for proposed construction and completion of subgrade and related works for the ECRL project.

The first job, which will start on Sept 7, 2020 and be concluded by Jan 6, 2023, is worth RM53.74 million.

The second job, which will also start on Sept 7, 2020 but be completed by Sept 6, 2022, is worth RM27.09 million.

Barring any unforeseen circumstances, the subcontracts are expected to contribute positively to the group's future earnings for the duration of the subcontracts and will not have any effect on the group's share capital and substantial shareholders' shareholdings.

AISB is principally involved in the business of providing earthworks and civil engineering services.

Advancecon said the group intends to fund the jobs via internally generated funds and/or external borrowings.

"These contract wins are a timely boost for the group's existing earthworks and civil engineering works order book, and signify the confidence our client has in us to be part of the country's biggest infrastructure development," said its group chief executive officer Datuk Phum Ang Kia.

"These contracts prepare the group to be well positioned and more competitive in future ECRL tenders due to the presence of mobilised resources. The government's ongoing plan to implement the ECRL in the next few years is certainly positive for the group's future prospects within this infrastructure megaproject," he added.

Following these two subcontracts, Advancecon's order book expands to RM771.1 million, with earnings visibility for a minimum of 28 months.

Shares in Advancecon closed unchanged at 39 sen today, valuing the company at RM154.3 million.

Edited by Lam Jian Wyn

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