Sarawak Consolidated Industries Bhd (SCIB), a key player in Malaysia’s construction sector, has announced the mutual termination of its RM97.75 million contract with Landasan Kapital (M) Sdn Bhd. The contract, initially set to cover a period of 23 months, was designed to encompass a wide range of construction tasks for a residential project, including the provision of materials, labor, tools, and the execution of civil, structural, architectural, and mechanical works.
In a recent disclosure to Bursa Malaysia, SCIB highlighted its decision to enforce its rights under the agreement while taking decisive steps to address and minimize potential risks and delays associated with the project. The agreement between SCIB and Landasan Kapital for the contract’s termination effectively absolves both parties from all claims, liens, and obligations tied to the project works. This move ensures that the core responsibilities stipulated in the original contract remain unaffected.
Despite the contract’s termination, SCIB reassures its stakeholders that this development will not adversely affect its financial gearing, earnings per share, or net assets for the fiscal year ending on June 30, 2024 (FY2024). Given that the project had not commenced, the company’s financial records for the period do not reflect any associated revenue or costs.
SCIB’s board of directors, after careful consideration of all pertinent factors surrounding the contract’s termination, has concluded that this course of action serves the company’s best interests. This strategic decision reflects SCIB’s commitment to maintaining its financial health and operational integrity while navigating the complexities of the construction industry.
This announcement comes on the heels of SCIB’s financial turnaround in the second quarter of FY2024, where the company reported a net profit of RM846,000, a significant improvement from the net loss of RM2.82 million recorded in the corresponding period of the previous year. Furthermore, SCIB witnessed a quarterly revenue increase to RM38.09 million from RM36 million year-on-year.
The termination of the contract with Landasan Kapital marks a critical juncture for SCIB as it continues to adapt and evolve in response to the dynamic demands of the construction sector. With a market value of RM208.1 million, SCIB remains focused on leveraging its core competencies to secure and deliver high-quality construction projects, ensuring long-term growth and stability.
