ZELAN EYEING MORE PENGERANG PROJECTS
ZELAN EYEING MORE PENGERANG PROJECTS
The Malaysian Reserve
Kavithah Rakwan, Friday 15th May 2015
Zelan Bhd is eyeing more construction projects locally and is participating in some Pergerang, Johor tenders as it seeks to turnaround the company in terms of improving its operating profit and retained earnings.
"They have been dishing out a lot of tenders, so to say that we are not participating is not true."
"We are participating in some. We will see if we are successful in the pre-qualification stage or even to getting to award," said Zelan's MD Adnan Mohammad after the group's AGM yesterday.
"The amount might be small,but it will allow Zelan to kickstart - or rather complete - the project. There is 515.49 million dirham worth of works that are still incomplete," the source added.
He said the amount of projects it is bidding for is "substantial" although he did not disclose specific values.
While the group has started making profit over the last two years, Adnan said it is still trying to place itself on a firmer financial footing in terms of improving its operating profit.
"We are trying to secure more projects that are profitable to place Zelan on a firmer financial footing. We are relying on tenders that we are going to participate locally."
"If you look at our financial results last year, our profit after tax (PAT) is already positive. However, the operating profit is still low. It was largely because of some provisions that we made but it would reverse this year."
"So moving forward from this year, if we are able to secure one or two more contracts, our orderbook will be increasing," said Adnan.
Zelan's current orderbook stands at RM1.1 billion which would last till the year 2017. Adnan said Zelan will also see more recurring income from the projects that it has secured, specifically the RM391.6 million construction job of the Phase 3 of International Islamic University Malaysia in Gambang, Pahang which will be completed and handed over early next year.
"When that is handed over, that is the concession that we are going to have for the next 20 years. That will be our recurring revenue," he said.
Other jobs that Zelan has been awarded includes that from the East Coast Economic Region Development Council for the construction of a RM248.73 million drawbridge connecting Muara North and Muara South in the Kuala Terengganu city centre.
Zelan is also one of the companies that was recently awarded a contract involving Petroliam Nasional Bhd's Pengerang Integrated Complex (PIC) involving the basic design, detail engineering, procurement, construction and commissioning of the material off-loading facilities jetty at Tanjung Setapa, Johor.
Zelan's current overseas focus is a mixed development project in Abu Dhabi with Meena Holdings LLC, which is the owner of the Meena Plaza mixed use development project that Zelan was supposed to complete but did not due to certain disputes.
"We are progressing with the work but obviously because our project has been suspended before there is a new requirement by the authority. We are negotiating with the client to address the new requirement. There is a possibility that the project may be extended," said Zelan's COO, Hazimi Baharum.