KUALA LUMPUR (Oct 8): Ireka Corp Bhd (KL:IREKA), a Practice Note 17 (PN17) construction company, has secured a sub-contract worth RM1.07 billion for the upgrade of a section of the Pan Borneo Highway in Sabah.

The four-year sub-contract, granted by Sabah-based Gammerlite Sdn Bhd, involves the upgrading of the road from Kampung Lomou Baru to Kampung Toupus, Ireka said in a statement on Tuesday.

"The award of this contract is a testament to Ireka's technical expertise and long-standing reputation for delivering large-scale infrastructure projects. This achievement further strengthens Ireka’s position in the construction sector, contributing to the group’s future growth and sustainability goals," the company said.

Ireka expects the sub-contract to positively contribute to its net assets and earnings for the financial year ending June 30, 2025 and the project's duration.

Ireka triggered PN17 criteria in August 2020 due to its auditors' concerns about its ability to continue as a going concern, as its shareholders' equity fell below the required threshold. It officially entered PN17 status on March 1, 2022, after Bursa Malaysia rejected its application for an extension of the relief period that was provided during the pandemic.

Ireka is currently awaiting Bursa's approval for its application for a six-month extension to submit its regularisation plan.

For the fourth quarter ended June 30, 2024, Ireka narrowed its net losses to RM16.9 million from RM47.27 million a year earlier, with revenue declining to RM6.07 million from RM7.17 million.

The company attributed its earlier losses to exceptional items, including a mark-to-market loss on its joint venture partner Aseana Properties Ltd shares.  

Shares in Ireka rose as much as 16.95% or five sen ahead of the announcement, closing at 34.5 sen on Tuesday, giving the company a market capitalisation of RM78.59 million. Year-to-date, the company’s shares are down 31%.