KUALA LUMPUR: Bintai Kinden Corp Bhd plans to make the oil and gas (O&G) segment its core business, in addition to its core competency of mechanical and electrical engineering services, as it seeks a return to profitability. The company fell into the red in the financial year ended March 31, 2014 (FY14) with a net loss of RM1.51 million from a net profit of RM819,000 in FY13.
Group managing director Ong Choon Lui said the group is currently involved in installations of electrical and instrumentation systems for small O&G refineries in Bintulu and the east coast of Peninsular Malaysia.
Bintai Kinden also expressed an interest in participating in Petroliam Nasional Bhd’s refinery and petrochemical integrated development (Rapid) project in Pengerang, Johor.
The group’s core business of mechanical and electrical engineering services currently constitutes 75% of total revenue, with the property development segment making up 10% and its O&G and industrial businesses the rest.
“This contribution ratio will remain for the short term as we strive to grow our O&G and industrial businesses,” said Ong in an interview with The Edge Financial Daily recently.
“We will try to diversify through our connections in the region as well as the industry, to be more focused on O&G and industrial projects,” he said.
The group swung into a net loss in FY14 on higher operating expenses. This was despite revenue for the three months to March 31 this year rising 16% to RM398.8 million from RM344.8 million a year ago.
Bintai Kinden’s maiden property project is the 504-unit Rafflesia condominium project in Bandar Baru Sentul, which the group is jointly developing with the Kuala Lumpur City Hall.
“The gross development value of the project is some RM200 million, and the units have been fully taken up,” said Ong, adding that contribution from the property development segment has started.
He said the group is currently looking to collaborate with other parties on other property development projects at strategic locations.
“The Rafflesia project initially started as a rescue project to complete the work by the former developer. Since then, it is our commitment to build not in accordance with the market but to the needs of the people, as we have been in Sentul for more than 15 years,” said Ong.
The group is also an electrical works subcontractor for several packages in the Klang Valley Mass Rapid Transit project.
“We are only involved in parts of the project encompassing the Sungai Buloh and Kota Damansara areas,” said Ong.
In addition, the group is involved in mechanical and electrical works for a shopping complex in Kota Kinabalu, Sabah worth RM100 million, and for a Japanese factory project in Shah Alam.
“Our current order book from mechanical and electrical engineering services stands at RM1 billion,” said Ong.
The group, which is currently working on several projects in Malaysia, Singapore and Indonesia, plans to expand to Myanmar.
“We have set up a subsidiary in Myanmar to look into the potential for business there,” said Ong.
“Our vision is big, but we have to be realistic. We are looking at strengthening our position in this region before looking into other regions,” said Bintai Kinden director Sharifah Kadnariah Syed Ahmad.
The group is currently doing the preliminary engineering works for the Mapletree Business City2 project in Singapore, which has a total contract sum of S$ 67.2 million (RM173.45 million).
On key challenges in the industry, Ong said it boils down to finding suitable talent.
“Finding all forms of talent who can help the group grow and retaining them is a challenge,” he said.
This article first appeared in The Edge Financial Daily, on June 23, 2014.
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