KUALA LUMPUR (March 12): Sarawak Consolidated Industries Bhd’s (SCIB) RM97.75 million contract with Landasan Kapital (M) Sdn Bhd has fallen through following a mutual termination between the two parties.

The engineering, procurement, construction and commissioning contract, originally planned to span 23 months, involved the supply of materials, labour, tools, and equipment for civil, structural, architectural, and mechanical works related to the construction of a residential project.

In a filing to Bursa Malaysia on Tuesday, SCIB said it was enforcing its rights under the contract and taking necessary measures to safeguard its interests and mitigate project risks arising from potential delays.

It said both parties have mutually agreed to terminate the contract, resulting in an unconditional release and indefinite discharge of all claims, liens, and obligations related to the project works. This includes any amendments made during the course of the contract, provided that the parties' original obligations remain intact.

SCIB emphasises that the termination will not significantly impact its gearing, earnings per share, or net assets for the financial year ending June 30, 2024 (FY2024). Since the project had not yet commenced, no revenue or costs were recorded in the accounts.

“The board of directors, having taken into consideration all aspects of the termination of the contract, is of the opinion that the entering of the aforesaid notice of termination is at the best interest of the company,” SCIB said.

For the second quarter of FY2024, SCIB managed to make a turnaround when it reported a net profit of RM846,000 against a net loss of RM2.82 million recorded in the same period the prior year. Quarterly revenue increased to RM38.09 million from RM36 million in the corresponding quarter in the preceding year.

SCIB shares closed half a sen or 1.52% lower at 32.5 sen for a market value of RM208.1 million.