MRCB said to have go-ahead for RM1b Johor project

MRCB said to have go-ahead for RM1b Johor project

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) is understood to have obtained approval from the Government to commence with the RM1bil-rated Eastern Dispersal Link (EDL) in Johor.

The project, which would connect the North-South Expressway to the Iskandar Development Region (IDR) and the Johor Baru city centre, would not only lift its order book closer to RM3bil but also future earnings.

Prior to the EDL job, MRCB had a construction order book of around RM2bil and among its headline key performance indicators were that it wanted to replenish its order book annually to the tune of RM1.5bil.

A broker's report said the EDL would increase MRCB's recurring income base from concession earnings and estimated that MRCB would recognise about RM25mil in construction profits in building the EDL before toll charges start in 2010.

The report estimated that MRCB's earnings would be boosted to RM100.2mil, or 12.5 sen a share, for its 2007 financial year. Earnings per share were forecast to rise to 14.2 sen in 2008 and 15.7 sen in 2009.

It also estimated that the revised net asset value of MRCB would rise to RM3.47 a share from RM3.39 a share currently.

MRCB's order book has been expanding over the years as its 30% stake in the RM1.2bil Duta-Ulu Kelang Expressway (Duke) has bumped up the group's order book.

Once completed, toll concessions at Duke will provide MRCB a stable income stream.

Toll concessions are just part of what MRCB is eyeing.

The company is said to be keenly bidding for the Bakun power transmission job, which would dramatically alter the company's order book.

The Bakun project comprises two parts – the undersea cable portion valued at RM6bil and the overhead transmission lines worth RM3bil.

Apart from benefiting MRCB, the EDL is seen as a lift to property values in Johor Baru-IDR as land values in surrounding areas should increase with the highway.

The broker felt that Tebrau Teguh Bhd's water-front landbank of 1,012 acres should see higher values given its location between Tebrau and Johor Baru, where the EDL passes.