KUALA LUMPUR (June 20): Due to higher construction material prices, TCS Group Holdings Bhd has scrapped its plan to develop a condominium project, known as Arcadia, in Kuala Langat, Selangor.
The group, through its wholly owned units TCS Construction Sdn Bhd and Saujana Permai Development Sdn Bhd, had mutually agreed to terminate the letter of award entered between the parties two years ago.
TCS Construction secured the RM126 million condominium project from Saujana Permai in December 2021, which had a duration of 40 months and was scheduled to be completed in May 2025.
“The board is of the view that the termination of LA (letter of award) will not have any material effect on the earnings of the company and net assets of the group for the financial year ending Dec 31, 2023,” TCS announced on Bursa Malaysia’s website on Tuesday (June 20).
TCS’ net profit for the first quarter ended March 31, 2023 (1QFY2023) increased to RM105,000 from RM80,000 in 1QFY2022 as revenue jumped 77% to RM93.31 million from RM52.68 million.
The higher revenue in 1QFY2023 was driven by higher progress billing for ongoing projects — J Satine in Setapak, Vista Sentul and M Arisa in Sentul, Tropicana Miyu in Petaling Jaya and IOI Moxy Putrajaya — due to the advanced stage of construction.
This was also helped by the commencement of Helix2 in Petaling Jaya.
The group’s profitability remained affected by higher raw material costs due to the after effects of the Covid-19 pandemic, which caused disruptions in the building materials supply chain, said TCS.
Nonetheless, the group said it is seeking opportunities and bidding for projects in the fields of residential and commercial buildings, infrastructure and institutional building construction.
“On balance, we maintain our cautious view on the group’s outlook as the construction sector remains taxing,” said TCS in a filing dated May 30.
At Tuesday’s closing, TCS was three sen or 9.38% higher at 35 sen, valuing the group at RM134.3 million.
Source: EdgeProp.my
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