KUALA LUMPUR (July 23): Varia Bhd (KL:VARIA) said on Tuesday it had secured a construction subcontract worth RM555 million, sending shares in the company formerly known as Stella Holdings Bhd to their highest in nearly eight months.

Under the subcontract, Varia will supply labour, plants, materials, equipment, tools, transport, temporary works and ancillary needed to build a sewage treatment plant in Penang. The contract is for a period of 57 months and expected to complete by March 24, 2029, the company said.

"Securing this major project in Penang is a testament to Varia’s capabilities and reputation in the construction sector,” said Varia managing director Datuk Benson Lau Beng Sin. “This project not only strengthens our order book, but also aligns with our commitment to environmental, social, and governance principles.”

The stock surged as much as 18% or 16.5 sen to RM1.07 following the contract announcement. Varia ended Tuesday at RM1.02, its highest since December 1, 2023. The closing price gave the company a market capitalisation of RM425.34 million on Bursa Malaysia.

The counter was also more active than usual with a trading volume of 1.18 million shares, nearly 15 times the trading volume’s 20-day moving average.

The new contract lifts Varia’s total order wins for 2024 to RM653.4 million, the company said.

The broader project involves the design, construction, and completion of a comprehensive sewerage treatment plant in Butterworth, Penang, and includes a network pump station, sewerage network, rationalisation and decommissioning, testing, commissioning, and maintenance works.

“The project is a key component of Penang's efforts to enhance its wastewater management system, which is essential for maintaining environmental integrity and supporting urban growth,” Varia added.