CTCI Corp (中鼎工程), the nation’s largest construction and power engineering service provider, expects its performance to improve in the second half of the year after a petrochemical plant project in Malaysia resumes work next month.
“One of our clients in Malaysia faced occupational safety problems, which delayed the construction of the project from April to next month,” CTCI chief financial officer Lin Meng-chih (林盟智) told an investors’ meeting in Taipei yesterday.
CTCI is negotiating with the client for compensation for idling workers at the petrochemical plant, he said, declining to elaborate.
“We hope the compensation would cover the decline in gross margins in the first half, which slid 0.42 percentage points year-on-year to 6.76 percent,” he said.
The company also expects revenue in the second half to outpace that of the first half due to contributions from more construction projects, but sales for the full year would be flat from last year, he said.
The company had a construction backlog of NT$188.8 billion (US$6.08 billion) as of last month, compared with NT$208 billion at the end of last year, signaling lower future sales contribution, the company said.
CTCI reported NT$17.8 billion in new contracts for the first eight months of the year, compared with NT$101.7 billion for the whole of last year, but it hopes to secure about NT$113 billion in potential contracts by the end of this year, Lin said.
New contracts in the first half were mainly from Taiwan and Southeast Asia, which accounted for 43 percent and 32 percent respectively, while China made up 21 percent, company data showed.
Power plants contributed 35 percent to overall sales, while environmental projects, such as wastewater treatment facilities, accounted for 24 percent, and refinery and petrochemical projects made up 23 percent, data showed.
CTCI said that potential bidding opportunities for next year are estimated to be about NT$426 billion, with refinery and petrochemical projects making up 70 percent, including liquefied natural gas terminals for Taiwan Power Co (台電) and CPC Corp, Taiwan (台灣中油), as well as the MRT’s Wanda and Circular Lines, and several petrochemical projects in the Middle East and Southeast Asia, spokesperson Hsiao Ming-cheng (蕭明證) said.
CTCI reported that first-half net income fell 32.18 percent annually to NT$493.54 million, or earnings per share of NT$0.65.
Cumulative revenue totaled NT$37.67 billion in the first eight months, down 4.97 percent from the same period last year.
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