Thursday 20 Jun 2024
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KUALA LUMPUR (Feb 8): MGB Bhd’s indirect wholly owned unit MGB International for Industry (MGBI) has secured two purchase orders, totalling approximately 94.5 million riyals (RM119.55 million), from Saudi Arabia-based Sany Alameriah Industrial (SA).

In a Bursa Malaysia filing on Thursday, the group said the purchase orders are in relation to a contract signed between SA and SALD Industrial Company for the supply and installation of precast elements consisting walls, staircases, beams and hollow core slabs for 400 villas in the Roshn Alarous development.

The Roshn Alarous, located north of Jeddah, the Kingdom of Saudi Arabia, is a highly prestigious development that extends over four million square meters and will offer more than 18,000 residential units once all phases have been fully developed. 

MGBI inked a joint-venture agreement with SA in July last year, in which the company will operate SA’s precast concrete factory. 

This marks MGB’s first international project, and a well-timed entry into the kingdom’s property development and housing sector. 

The kingdom has reportedly undertaken substantial reforms, such as the introduction of the Saudi Housing Programme in 2018, in line with its Vision 2030, with an aim to increase accessibility to affordable, quality, safe and well-located housing in order to raise homeownership to 70% by 2030. 

Therefore, MGBI's expertise in mass construction of affordable housing positions the company advantageously, as it can potentially secure new contracts in the future, according to MGB. 

MGB said the entire scope of supply and installation of precast elements shall be completed within 14 months from the commencement date, which is the date of receipt of advance payment or when the approved shop drawing is submitted, whichever is later. 

“The purchase orders will have no effect on the share capital and shareholding structure of the company, but they are expected to contribute positively to revenue and gross profit of the company,” said MGB. 

For the cumulative nine months ended Sept 30, 2023, MGB’s net profit jumped threefold to RM36.32 million from RM11.38 million the year before, as revenue climbed 42.65% to RM666.5 million from RM467.22 million. 

Shares in MGB were unchanged at 63.5 sen at Thursday’s noon break, giving the construction arm of LBS Bina Group Bhd a market capitalisation of RM372.76 million. 

Edited ByIsabelle Francis
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