AZRB reaches financial close on RM1.5b KLORR

KUALA LUMPUR: Terengganu-based construction outfit Ahmad Zaki Resources Bhd (AZRB) has reached financial close with Bank Pembangunan Malaysia Bhd for the RM1.5 billion KL Outer Ring Road (KLORR) project, industry sources say.

This could indicate that AZRB is finalising details of the concession agreement with the government and that work on the project could commence soon. Financial close is the last hurdle before funds can be drawn down to commence work on a project.

AZRB was given the letter of intent to undertake the project back in 2008, building the 40km stretch from Sungai Long to University Islam Antarabangsa in Gombak, linking up with the South Klang Valley Expressway and Kuala Lumpur-Kuala Selangor Expressway, among others.

AZRB officials could not be contacted for comment.

The job in question could be a boost for AZRB. As at end-March this year, AZRB had an order book of RM1.06 billion. Some of the more prominent jobs were the design and building of Complex Kerja Raya 2 in Jalan Sultan Salahuddin, Kuala Lumpur, for RM266 million, packages 2, 6, 5A and 9C of the East Coast Highway amounting to some RM207 million and Universiti Darul Imam package 3 building works valued at RM192 million.

For the first three months of FY11 ended March, AZRB posted a net profit of RM5.16 million on the back of RM124.66 million in revenue. Earnings per share for the three months in review stood at 1.86 sen. In contrast to the corresponding period a year ago, net profits fell by about 33%, despite revenue gaining some 15%.
Aimed at dispersing traffic in the city centre, the KL Outer Ring will link Cheras to Rawang.

In the notes accompanying its financials, AZRB said its results were adversely impacted by exceptional losses arising from the termination of the Alfaisal University project in Saudi Arabia, as reported in the final financial quarter of 2010.

As at March 31, 2011, AZRB had cash and cash deposits amounting to RM110.03 million, while on the other side of the balance sheet, it had long-term borrowings amounting to RM46.92 million and short-term debt obligations of RM95.21 million. With net debt of RM32.1 million and shareholders funds of RM186.71 million, the company has a modest net gearing ratio of 17.2%. The stock trades at just below its net assets per share of 65.6 sen per share.

AZRB is 59.24% controlled by Zaki Holdings (M) Sdn Bhd. Zaki Holdings is the vehicle of Datuk Seri Wan Zaki Wan Muda, the executive vice-chairman of AZRB, managing director Datuk Wan Zakariah Wan Muda and executive director Datuk Wan Zulkifli Wan Muda.

AZRB’s ended trading yesterday at 64.5 sen, inching up 1.5 sen. The company’s shares had earlier in the day slipped to a 52-week low of 59 sen.