Bina Puri Holdings Bhd is expanding its exposure in electricity-generation projects overseas to establish a larger recurring income base.
The company was looking at more power plant ventures in Indonesia and Nepal for now, but would not limit itself to these two markets in the future.
Bina Puri, whose core business is in construction, is trying to expand its concession operations in favour of a more sustainable earnings stream against the cyclical nature of the construction industry.
The company acquired an 80% equity stake in Indonesia-based power plant owner and operator PT Megapower Makmur for RM807,581. Megapower runs two units of two-megawatt electricity generation facilities within the Toboali and Muntuk enclaves in Bangka Island, Indonesia. The power generated by Megapower is sold to Perbadanan Letrik Negara, Indonesia which is equivalent to Malaysia’s state-owned utility Tenaga Nasional Bhd.
Bina Puri plans to build and operate electricity generation facilities in two other locations in Indonesia to meet the surging power demand in the country.
Bina Puri already has a few concessions overseas. Among others, the company now derives recurrent income from its highway concessions in India — the Vijayawada-Eluru Expressway and Tada-Nellore Expressway in Andhra Pradesh, besides the Chittorgarh-Mangalwar Highway in Rajasthan.
In Nepal, Bina Puri has undertaken the construction of a five-star hotel in the kingdom’s capital city of Kathmandu. The builder also has operations in other countries including Vietnam, Thailand, the United Arab Emirates, Indonesia, Pakistan and Brunei Darussalam.
On the construction front, Bina Puri bagged several jobs recently. The company announced that it secured the Stormwater pipeline project from the Ministry of Municipal and Rural Affairs, Saudi Arabia. The project is worth (saudi riyal) SAR6.96 million (RM5.73 million).
The company was looking at more power plant ventures in Indonesia and Nepal for now, but would not limit itself to these two markets in the future.
Bina Puri, whose core business is in construction, is trying to expand its concession operations in favour of a more sustainable earnings stream against the cyclical nature of the construction industry.
The company acquired an 80% equity stake in Indonesia-based power plant owner and operator PT Megapower Makmur for RM807,581. Megapower runs two units of two-megawatt electricity generation facilities within the Toboali and Muntuk enclaves in Bangka Island, Indonesia. The power generated by Megapower is sold to Perbadanan Letrik Negara, Indonesia which is equivalent to Malaysia’s state-owned utility Tenaga Nasional Bhd.
Bina Puri plans to build and operate electricity generation facilities in two other locations in Indonesia to meet the surging power demand in the country.
Bina Puri already has a few concessions overseas. Among others, the company now derives recurrent income from its highway concessions in India — the Vijayawada-Eluru Expressway and Tada-Nellore Expressway in Andhra Pradesh, besides the Chittorgarh-Mangalwar Highway in Rajasthan.
In Nepal, Bina Puri has undertaken the construction of a five-star hotel in the kingdom’s capital city of Kathmandu. The builder also has operations in other countries including Vietnam, Thailand, the United Arab Emirates, Indonesia, Pakistan and Brunei Darussalam.
On the construction front, Bina Puri bagged several jobs recently. The company announced that it secured the Stormwater pipeline project from the Ministry of Municipal and Rural Affairs, Saudi Arabia. The project is worth (saudi riyal) SAR6.96 million (RM5.73 million).
Including both projects, Bina Puri’s outstanding construction order book comes to RM2.59 billion to date. For 2010 alone, the company has so far secured RM1.64 billion worth of new jobs.
The biggest jobs in its current order book comprise the RM997.2 million project to build the new Low-Cost Carrier Terminal (via a joint venture) and the RM500 million construction-cum-development of Medini North in Johor.
Bina Puri’s latest set of financials has improved due to higher construction revenue. Its total turnover for the first half of 2010 climbed 76.2% year-on-year to RM566.14 million while net profit improved from RM2.58 million to RM4.85 million.
Nonetheless, while the company is getting more jobs, the concerns are its slim gross and net margin (of 4.7% and 1%, respectively, in 1HFY10), and a stretched balance sheet to undertake more big projects.
Bina Puri net assets per share stood at 97 sen as at June 30. It has cash of RM77.72 million against debt obligations of RM288.69 million, which translate into a net debt of RM210.97 million or a net gearing of 2.1 times based on shareholders’ equity of RM101.69 million.
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