Minetech aims to deliver double-digit revenue growth in FY16

KUALA LUMPUR: Mining and civil engineering company Minetech Resources Bhd hopes to deliver double-digit growth in revenue for its financial year ending March 31, 2016, driven mainly by upcoming government and public sector infrastructure projects.
Minetech offers quarry services, drilling, blasting, loading, hauling, rock crushing and loading of finished aggregates to the quarrying and civil engineering industries.
"If the government continues to spend on infrastructure (projects), I think it can be realised," its group COO Eng Kim Leng told reporters after its AGM here last Friday.
"We will definitely participate in all the infrastructure projects that the government has, including those recently announced in the 11th Malaysia Plan," he added.
The projects that it hopes to participate in include the Mass Rapid Transit Line 2 (MRT 2), West Coast Expressway, Pan Borneo Highway, Klang Valley Light Rapid Transit 3, as well as Pengerang in Johor Baru.

For the 15 months ended March 31, 2015, Minetech recorded a net profit of RM611,000 and revenue of RM197.33 million, attributed mainly to extraction of ore delivery and drill and blast, underground excavation and rock strengthening works for the MRT lines. The group changed its financial year-end from Dec 31 to March 31, therefore its cumulative year-to-date performance is for 15 months.

Eng said the company's remaining revenue is contributed by its quarry products segment, followed by its premix products, bituminous products and others, which include rental of machinery and trading of industrial machinery spare parts.

Commenting on the weaker ringgit against the US dollar, he said there is no drastic impact on the group's business, but it is slightly affected in raw material costs. The impact, he added, is insignificant because of the low global oil prices, which balanced the weak ringgit's impact on its raw material costs.

Diesel makes up more than 30% of Minetech's raw material costs. Manpower and heavy machinery make up the rest.
"The commercial diesel price has come down significantly. In our industry, diesel represents quite heavy raw material costs. So, right now, we don't see a huge impact, as global oil prices have come down," he added.

Eng said the group, which is venturing into the property sector, has just concluded the due diligence process for its proposed acquisition of Glamour Heights Sdn Bhd, which was expected to be finalised by the end of January 2015.
"I think it is good for any organisation that is diversifying to be extra careful, because the business is relatively new. We need to make sure that internally we have the expertise, meaning people with the skills and experience," he added.

Minetech in November last year signed a memorandum of agreement to acquire Glamour Heights and two of its existing projects, namely The Meru Dream Park and a condominium for RM27.45 million.
Minetech shares closed unchanged at 6.5 sen last Friday.