Mercury Industries shares fall on PR1MA construction contract termination

PETALING JAYA: Shares of Mercury Industries Bhd fell 4.8% to RM1.20, in response to Friday’s announcement that its 1Malaysia People’s Housing Scheme (PR1MA) construction contract has been terminated.

The estimated value of the suspended contract is RM73.06mil.

According to a Bursa Malaysia filing, Mercury Industries said that its 70%-owned subsidiary, Paramount Bounty Sdn Bhd (PBSB), was informed that the project owner, Perbadanan PR1MA Malaysia, was notified of the demobilisation from the project site.

“While the suspension will not have any effect on the share capital and net assets of the company, it is however, expected to reduce the earnings of Mercury Industries for the financial year ending December 31, 2018,” it said.

On Aug 14, PBSB received a Notification of Project Status dated Aug 8, 2018, from Aturan Prisma Sdn Bhd (APSB) in relation to the pro- ject.

The project, which was initially awarded by Upaya Jernih Sdn Bhd to PBSB, has been terminated and the balance value of the project was subsequently re-awarded by APSB to PBSB.

APSB has informed PBSB that the employer of the project has notified the project owner, Perbadanan PR1MA Malaysia, of the demobilization from the project site.

For the first quarter ended March 31, 2018, Mercury Industries posted a net profit of RM305,000, a 65% decline from sponding quarter last year.

In its quarterly earnings report, the group had said it remained cautiously optimistic that Mercury Industries will continue to remain profitable in 2018.

The group said this was due to the existing unbilled orderbook of construction works in hand, profit contribution from Mercury Building Supplies Sdn Bhd, as well as the interest savings from the repayment of the RM30mil term loan. the corre-