Mudajaya Group Bhd wants a recurring income of between 60 per cent and 70 per cent of its total revenue in five years, and is looking at expanding its business in India, Vietnam and the Middle East to achieve the target, particularly in the power, water and highway sectors.
“We’re looking at having more recurring income to hedge against the cyclical nature of the construction sector,” said group managing director and CEO Anto SF Joseph, adding that the regional markets provide a hedge for the group when activities in Malaysia slow down.
He said the group, which derives 60 per cent of its revenue from overseas, is eyeing jobs of its core competencies, such as power and water treatment projects.
He added that the group is also building highways, particularly under the build-operate-transfer concept, for both the domestic and international markets.
“Growing within Malaysia is limited and we see huge potential for growth in Asean and India. Having reached a certain level, our group needs to grow faster. Therefore we need huge projects and to own assets. Asean countries offer good opportunity for us to participate in our core activities,” he told a press conference after the group’s AGM yesterday.
On its independent power plant (IPP) project in Chhattisgarh, India, Joseph said the coal-fired plant is expected to contribute at least 20 per cent to its net profit. It will provide a stream of recurring income when it begins commercial operations next year.
“To have recurring income, we have to own assets as well. We expect to have another power plant operational next year in India when we start selling power there. We’re looking at acquisitions in India and within the Asean region.
“By 2014, we will have full recognition of the sale of power and we will reinvest in new assets to create more recurring income.”
Mudajaya’s orderbook stood at RM3.66 billion as of March 31. It has tendered for RM5 billion worth of domestic infrastructure projects and expects to be successful in some of these bids.
The group also intends to venture into the renewable energy sector such as wind and solar power.
