KUALA LUMPUR (June 12): Ecoscience International Bhd (KL:EIB), an integrated palm oil milling services provider, has secured a RM61.8 million contract for the construction of a crude palm oil (CPO) pretreatment plant and a plant, machinery, and equipment (PME) plant in Port Dickson.

In a bourse filing on Tuesday, Ecoscience announced that its wholly owned subsidiary Ecoscience Manufacturing & Engineering Sdn Bhd (EMESB) has accepted a letter of award from Oiltek Sdn Bhd to undertake the engineering, procurement, construction, and commissioning of civil and structural works for a CPO pretreatment plant and a PME plant, along with auxiliary buildings at the Port Dickson refinery.

Under the contract, EMESB is required to provide a performance bond equivalent to 10% of the contract amount before the release of the down payment, which must remain valid until the warranty bond is posted.

The completion date for the works is set to 534 days from the issuance of the letter of award, according to Ecoscience.

Failure to meet the completion date will result in EMESB incurring liquidated damages to Oiltek at a fixed rate of RM44,143 per day of delay, capped at 10% of the contract amount.

The contract is expected to positively contribute to Ecoscience’s earnings and net assets over its duration, the group said.

Ecoscience had reported losses for the third consecutive quarter. In the first quarter ended March 31, 2024, the group posted a net loss of RM3.25 million, compared to a net loss of RM31,300 a year earlier.

The widened loss was attributed to the increase in cost of sales and administrative expenses, including the appointment of a marketing agent for business expansion, renewal of permits, and salary costs.

Quarterly revenue saw a slight increase, up 0.71% year-on-year to RM45.5 million from RM45.2 million.

As of end-March, Ecoscience had total borrowings of RM51.64 million against deposit, cash, and bank balances of RM21.25 million.

At 2.40pm, shares in Ecoscience traded one sen or 2.82% lower at 34.5 sen, giving the group a market capitalisation of RM129 million.