CAHYA MATA SARAWAK ANNUAL REPORT 2016

www.cmsb .com.my Section 03 P E R F O RMAN C E 2 0 1 6 Cahya Mata Sarawak Berhad 22 CONSTRUCTION & ROAD MAINTENANCE DIVISION THE GROUP’S CONSTRUCTION & ROAD MAINTENANCE DIVISION UNDERTAKES AWIDE RANGE OF INFRASTRUCTURE CONSTRUCTION PROJECTS AND ROAD MAINTENANCE ACTIVITIES ACROSS THE STATE. These projects, involving road maintenance, water infrastructure, buildings and pavement rehabilitation works, are executed primarily through subsidiaries PPES Works (Sarawak) Sdn Bhd, CMS Roads Sdn Bhd and CMS Pavement Tech Sdn Bhd. The Division continues to derive stable recurring income from its two road concessions which are tasked with maintaining approximately 591km of Federal roads and 5,612km of State roads throughout Sarawak. In FY 2016, the Division registered a revenue of RM367.88 million, of which approximately RM132.17 million was derived from construction works, roads, water infrastructure projects and building works, while approximately RM235.71 million came from the two roadmaintenance concessions.TheDivision reported a lower PBT of RM93.79 million (FY 2015: RM135.40 million). The Division is committed to reinforcing its technical capabilities by investing in new machinery. In FY 2016, it continued to roll out continuous employee training activities to improve operational efficiencies and productivity, as well as Division-wide employee teambuilding initiatives to build employee engagement and commitment. The Division places an emphasis on the quality of work it undertakes in line with the Group’s Mission of ‘Producing Quality, On Spec & On Time’ which is intended to reinforce the Division’s reputation as a trusted contractor within Sarawak. TheConstruction&RoadMaintenanceDivisionwill ensure it remains competitive in its bids for new projects. Even with the reduction of road length by the Federal Government in view of the construction of the Pan Borneo Highway, the Division is targeting to sustain its earnings from on-going, as well as new longer-term construction projects and the remaining road maintenance concession. On 25 July 2016, PPES Works (Sarawak) Sdn Bhd and the Bina Puri Sdn Bhd joint venture received and accepted a Letter of Award from Lebuhraya Borneo Utara Sdn Bhd for the proposed development and upgrading of the Pan Borneo Highway in the State of Sarawak (WPC 06 - Sg. Awik Bridge to Bintangor Junction) for a contract sum of RM1.36 billion. At the time of writing, the Division has on hand a construction order book (aside from its road concession revenues) amounting to some RM1.30 billion. REVENUE FY 2016 RM 367.88 million PROFIT BEFORE TAX FY 2016 RM 93.79 million MANAGement DISCUSSION AND ANALYSIS