KUALA LUMPUR (Oct 17): Varia Bhd (KL:VARIA) has secured a contract worth RM571.8 million from the Social Security Organisation (Socso) to build a rehabilitation centre in Setiu, Terengganu.

Its wholly-owned subsidiary, Pembinaan Teguh Maju Sdn Bhd, accepted the 30-month contract on Thursday. The date of site possession is set for Oct 29, 2024, with expected completion on April 28, 2027, Varia said in a stock exchange filing.

Additionally, the construction and property development company said that the contract is expected to contribute positively to its earnings over the duration of the project.

“The risk factors affecting the contract include changes in the economic, political, and regulatory environment, as well as general operational risks. The group will take appropriate measures to mitigate these risks,” said Varia, formerly known as Stella Holdings Bhd.

Varia managing director Datuk Lau Beng Sin said the latest project provides the group with an opportunity to replicate its past track record, having built a rehabilitation centre in Perak, making inroads into construction in the healthcare industry.

“We are extremely delighted to contribute our expertise to build a rehabilitation centre with comprehensive supporting medical facilities and related infrastructures.

"We foresee the construction of this rehabilitation centre at Terengganu state will support our long-term strategies and objectives to become a full-fledged construction services provider, hence enhancing shareholder value of Varia Berhad in the future,” Lau said in a statement.

The latest contract win lifted Varia’s current orderbook to RM3.08 billion from RM2.24 billion as of Aug 27.

For the 15-month period ended June 30, 2024, the group reported a net profit of RM764,000, compared to a net loss of RM14.39 million in the previous year, largely driven by Pembinaan Teguh Maju's contributions.

In September, Pembinaan Teguh Maju secured a flood mitigation project worth RM334.69 million in Kota Tinggi, Johor. Prior to that, in August, it secured a flood mitigation project worth RM410.3 million in Segamat, Johor.

Shares of Varia closed unchanged at 88 sen on Thursday, valuing the group at RM380.6 million.