ANNUM Bhd (formerly Cymao Holdings Bhd) is making its diversification into the construction industry matters to the company’s topline and bottom line.
This follows the inking of a collaboration agreement between the company’s indirect wholly- owned subsidiary Annum EPCC Sdn Bhd with Greentech IOT Technology Sdn Bhd to participate in the RM62.25 mil Sarawak Water Supply Grid Programme.
A filing with Bursa Malaysia today shows that the project entails a proposed pipeline from the Salim Water Treatment Plant (under the Sibu Water Board) to the Kanowit Sibu Division.
The work scope includes the provision of supply, laying, testing and commissioning of the pipelines.
In essence, the project is part of the initiatives by the Sibu Water Board to address inadequate water supply to meet demand given the fast-growing population in the division.
According to the collaboration agreement, Annum EPCC is entitled to 50% of the net profit in relation to the project with the balance meant for Greentech IOT.
In a statement, Annum said the collaboration is in line with the company’s continuous effort to expand its construction business which includes engineering, procurement, construction and commissioning.
“This collaboration would help the company to build its credentials and track record in the construction industry as well as provides additional revenue stream and enhance its earnings base,” Annum pointed out.
Moreover, the collaboration provides a strategic opportunity for Annum to participate in government-related projects that would enhance the company’s construction portfolio while strengthening its position as a construction player in the construction industry.
“The successful execution of this project would build a track record for the company to undertake or bid for other government projects,” noted Annum.
“We believe that this collaboration will benefit the group in the long run. It demonstrates the added value of our growth potential in the geographical expansion of our businesses, especially in East Malaysia.”
Annum also expects the collaboration to contribute positively to the group’s future earnings and value to the shareholders. Moving forward, the group will focus on high margin businesses, especially infrastructure and water base industries in East Malaysia by exploring more partnership projects to sustain the group’s earnings.
At 3.54pm, Annum was down 5 sen or 4.46% to RM1.07 with 3.09 million shares traded, thus valuing the company at RM80 mil. – Oct 25, 2021
