Prestariang to see improved financial results in FY17
KUCHING: Prestariang Bhd (Prestariang) is poised to see significant increase in earnings and turnover in financial year 2017 (FY17) ending December 2017.
The research arm of AmInvestment Bank Bhd (AmInvestment Bank) in a report yesterday said the company’s improved financial performance will be contributed by the income from a government project called Sistem Kawalan Imigresen Nasional (SKIN).
Meanwhile, SKIN is an integrated technology platform aimed at enhancing the core applications and infrastructure of the national immigration system.
To recap, AmInvestment Bank noted the Federal Government had on November 18, 2016 approved Prestariang’s proposal to implement SKIN with the objective to beef up the security at the national border.
The research firm observed the public-private partnership project has a 15-year concession period comprising three years to build and deploy and 12 years of operational maintenance phase under a build, operate, maintain and transfer (BOMT) arrangement.
The research firm gathered that 12 annual payments averaging RM295 million each year will be made to Prestariang after three years, when the system is fully functional.
It estimated that the project will contribute a value of RM3.5 billion.
AmInvestment Bank believed Prestariang could account for the revenue from SKIN in the company’s accounts based on the accounting standards of service concession arrangements.
Based on a project internal rate of return of eight per cent, the research firm believed the total costs to build and deploy were estimated to be RM1.9 billion while the maintenance phase is expected to cost RM1.2 billion in total for 12 years.
AmInvestment Bank estimated that the majority of the costs for SKIN will be incurred in the first three years, for instance during the build and deployment phase.
Elaborating further, the research firm projected annual costs of RM617 million in the first three years and RM103 million subsequently in maintenance phase.
AmInvestment Bank forecasts