During the Period, the Group's revenue was RM311.9 million (approximately HK$642.5 million) (1H2017: RM359.1 million), despite most of the projects being still at the early stage of completion. Gross profit amounted to RM44.8 million (approximately HK$92.3 million), while gross margin was 14.4% (1H2017: RM65.9 million and 18.4% respectively). The decrease in gross profit was mainly due to the early stage of progress for most of the projects in hand;and the wait for the final account and claim settlement of the completed projects. Consequently, the Group's net profit for the Period was RM13.6 million (approximately HK$28.0 million) (1H2017: RM32.6 million).
Despite relatively fewer projects having been booked in 1H2018, the Group has maintained its business momentum by securing new projects and contracts during the Period, which has laid a solid foundation for the growth of its future earnings. During the Period, the Group has successfully added 19 new projects worth RM244.5 million (approximately HK$503.7 million) in contract value.
Construction Services
The Construction Services sector continued to be BGMC's main revenue contributor, contributing 98.2% or RM306.4 million in 1H2018 (approximately HK$631.2 million) (1H2017: RM353.8 million).
During 1H2018, the Building and Structure segment contributed 73.6% or RM245.2 million (approximately HK$505.1 million). The projects near completion included MSM Warehouse, the Serini Melawati and D'Pristine Medini. Meanwhile, those projects progressing well included the Sky Seputeh, Setia Spice and V-Residency 5. The Group had also started new projects such as the Building Works for the Melaka 2,422 megawatt ("mw") Combined Cycle Gas Turbine ("CCGT") Power Plant and the Tenaga Nasional Berhad ("TNB") Worker's Quarters. Moreover during the Period, BGMC secured four new contracts worth RM163.7 million (approximately HK$337.2 million) including the Building Works for the Melaka 2,422mw CCGT Power Plant and the TNB Worker's Quarters. The Group had an outstanding order book of RM799.9 million (approximately HK$1,647.8 million).
For 1H2018, BGMC undertook Energy Transmission and Distribution works that involved the installation of 132 kilovolt ("kV") underground cabling systems and the construction of a 275/132kV power substation. This segment has contributed 8.9% or RM29.5 million (approximately HK$60.8 million) of BGMC's revenue in 1H2018 and it had recorded healthy growth of 10.5%. The increase was made possible with the construction of PMU 275/132kV Tanjung Langsat which is close to completion while the underground cabling works into PMU MRT Semantan from PMU Damansara City to PMU Brickfield have also made to an advance progress. With the award of another new contract for 132kV underground cabling installation works from PMU Sri Hartamas to PMU Matrade worth RM15.2 million (approximately HK$31.3 million), this segment had an outstanding order book of RM92.6 million as at 31 March 2018 (approximately HK$190.8 million).
During 1H2018, the Mechanical and Electrical segment has contributed RM22.0 million (approximately HK$45.3 million) in revenue, accounting for 6.6% of BGMC's total revenue. The segment has a total of 18 ongoing projects. During the Period, the Group secured 12 new contracts in this segment worth RM28.8 million (approximately HK$59.3 million) in total and had retained healthy outstanding contracts worth RM160.7 million (approximately HK$331.0 million).
The Earthwork and Infrastructure segment has recorded RM9.6 million (approximately HK$19.8 million) of revenue in 1H2018 or 2.9% of the total revenue. BGMC has secured a new contract in 1H2018 for earthworks, soil improvements works, instrumentation works and its associated works at Kuala Langat for a contract sum of RM36.0 million (approximately HK$74.2 million). This new contract has boosted the outstanding orders to RM48.5 million (approximately HK$99.9 million) in total as of 31 March 2018.
Concession and Maintenance Services Sector
In 1H2018, the Concession segment recorded an imputed interest income of RM21.5 million (approximately HK$44.3 million), while the Maintenance Services segment contributed RM5.5 million (approximately HK$11.3 million) (1H2017: RM21.8 million and RM5.3 million respectively) to the Group's revenue. The remaining contract period for our UiTM Concession stood at 17 years and 8 months as of 31 March 2018. The outstanding imputed interest income for its Concession segment that is yet to be recognized is amounted to RM853.8 million (approximately HK$1,758.8 million) while the outstanding contract value for the Maintenance Services segment is now amounted to RM189.9 million (approximately HK$391.2 million).
The success of the UiTM Build, Lease, Maintain and Transfer ("BLMT") project has elevated BGMC's performance and profile in the Concession and Maintenance Services sector and this in turn has enhanced the ability to secure more concessions in the future. Leveraging the experience and expertise in the Construction Services sector and the Concession and Maintenance Services sector, BGMC has secured another concession project to construct and develop a Large Scale Solar PV Plant ("LSSPV Plant") of 30 megawatt alternate current ("MWa.c.) at Kuala Muda, Kedah, Malaysia. It has accepted the letter of award from the Energy Commission of Malaysia and signed a 21-year power purchase agreement with TNB, the sole electricity distributor in Peninsular Malaysia. The commercial operation date of the LSSPV Plant is scheduled to be on 30 September 2020.
PROSPECTS
In Malaysia, BGMC foresees construction projects to increase which will also increase the number of concession projects in transportation, road, communications, healthcare, energy and education sectors undertaken by the government of Malaysia. BGMC believes that it is working from a position of strength to capture the concession projects under the Private Finance Initiative programme which will widen its customer base and at the same time, strengthen its reputation in both Malaysia and the regional construction landscape.
BGMC sees promising prospects as it boasts both a high outstanding value and a strong replenishment of its order book. The newly won concession project to construct and develop a 30 MWa.c. LSSPV plant will boost the Group's performance over the next 24-to-36 months.
Tan Sri Barry Goh, Chairman and Executive Director of BGMC, said, "Moving forward, we will optimise productivity and replenish the order books in the next six months, tendering for projects in the corporate, both the residential and commercial property and industrial sectors, government-linked projects and supporting infrastructure projects in Malaysia as well as seize opportunities available elsewhere in the Southeast Asia region. At the same time, we will look for possible opportunities via strategic partnerships to extend our portfolio and footprint across the region, thereby increasing our market share in the near future."
As at 31 March 2018, BGMC's order book for the Construction Services sector stood at RM3.6 billion (approximately HK$7.4 billion), while its outstanding order book stood at RM1.1 billion (approximately HK$2.3 billion).
Major Ongoing Projects - Contract value
D'Pristine Medini: Construction of a mixed development consisting of a 3-storey retail unit, 6-storey parking facilities, a 23-storey office tower, a 28-storey SOHO tower, a 29-storey SOHO tower and a 27-storey hotel tower at Medini Iskandar, Johor, Malaysia - RM580,000,000 / HK$1,194,800,000
The Sky Seputeh: Construction of two blocks of 37-storey towers consisting of 290 units of apartments, car parks and other facilities at Taman Seputeh, Wilayah Persekutuan, Malaysia - RM292,020,000 / HK$601,561,200
Setia Spice: Construction of a 26-storey building which consists of a 19-storey hotel tower (453 rooms), a three-storey carpark, a four-storey hotel facility and a two-storey basement carpark at Setia Spice, Bayan Lepas, Penang, Malaysia - RM209,488,000 / HK$431,545,280
The Serini: Construction of two 38-storey tower blocks consisting of 528 units of apartments, car parks and other facilities at Melawati, Selangor, Malaysia - RM178,908,000 / HK$368,550,480
TNB Worker's Quarters: Construction of one eight-storey block of executive quarters (24 units), three nine-storey blocks of non-executive quarters (160 units) and other facilities at Kuala Berang, Terengganu, Malaysia - RM76,531,000 / HK$157,653,860
V-Residency 5: Construction of a 24-storey tower consisting of apartments and other amenities at Selayang Town, Gombak District, Selangor, Malaysia - RM66,850,000 / HK$137,711,000
Melaka Power Plant: Building Works for the Construction of a 2,422mw Combined Cycle Gas Turbine Power Plant at Kuala Sungai Baru, Alor Gajah, Melaka, Malaysia - RM49,853,000 / HK$102,697,180
About BGMC International Limited
Founded in 1996, BGMC International Limited is a construction services company based in Malaysia. With an operating history of over 20 years, it provides a wide range of construction services to customers. Armed with experience and expertise in construction services, the Group is capable of undertaking public private partnership (PPP) projects based on the Build, Lease, Maintain and Transfer (BLMT) model that can allow it to generate long-term recurring cash flow.
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