KUALA LUMPUR: Practice Note 17 (PN17) construction company Ireka Corporation Bhd saw its share price soar by up to 77 per cent during morning trade yesterday after announcing it had secured a RM1.07 billion subcontract for the Pan Borneo Highway project in Sabah.
The stock climbed 77 per cent or 26.5 sen to 61 sen, its highest level since April 2022, before ending the day at 50 sen.
Ireka announced on Tuesday that it had been awarded the four-year subcontract by Sabah-based Gammerlite Sdn Bhd.
The project involves upgrading the road between Kampung Lomou Baru and Kampung Toupus.
The company stated that this contract strengthens its standing in the construction industry and supports its long-term growth and sustainability goals.
Ireka also said that work on the project is set to begin on Sept 30, 2024, and will take place over 48 months.
The contract is expected to boost the company's order book and generate a steady stream of revenue over the next four years.
Ireka expects the subcontract to positively impact its net assets and earnings for the financial year ending June 30, 2025 (FY2025), and throughout the project's duration.
The company entered PN17 status on March 1, 2022, after Bursa Malaysia rejected its application for an extension of the relief period granted during the Covid-19 pandemic. It is currently awaiting Bursa's decision on its request for a six-month extension to submit its regularisation plan.
For the fourth quarter ended June 30, 2024 (4QFY2024), Ireka narrowed its net loss to RM16.9 million, down from RM47.27 million the previous year, though revenue slipped to RM6.07 million from RM7.17 million.
The company attributed the earlier losses to exceptional items, including a mark-to-market loss on shares of its joint-venture partner Aseana Properties Ltd.