KUCHING: KKB Engineering Bhd has secured two contracts worth a combined RM29 million for the supply of pipes and fittings as well as steel products. The steel fabricator has entered into an agreement with Sinohydro Corporation (M) Sdn Bhd for the supply of pipes and fittings.
The contract duration is about nine months.
In the second contract, KKB said it had received an additional purchase order for the annual supply and delivery of steel products from Syarikat SESCO Bhd over a four- month period.
“The total combined contract sum of the two contracts is approximately RM29 million. “The contracts are expected to contribute positively to the earnings and net assets of the KKB group for the financial years ending December 31, 2019 and 2020,” the company said in a filing with Bursa Malaysia.
On the risk factors affecting the contracts,KKB said these include execution risks, such as availability of materials and skilled manpower, changing in pricing, weather conditions and /or political, global economic and regulatory conditions.
In a separate announcement, KKB said its 100 percent owned subsidiary KKB Builders Sdn Bhd (KKBB) had received RM4 million from Global Upline Sdn Bhd being the agreed settlement sum to a longstanding dispute arose from the termination of a construction subcontract by KKBB seven years ago.
KKBB sacked Global Upline as subcontractor for proposed earthwork of a project in Samalaju Industrial Park, Bintulu on June 21, 2012 after it claimed that Global Upline had failed to carry out its obligations under the sub-contract agreement without any valid grounds.
Upon termination, KKBB took possession of the site and proceeded to take over and execute the balance of the sub-contract work.
Global Upline had alleged that the termination order was illegal, null and void and served KKBB with a writ of summons and made claims of about RM31.64 million, comprising payments for works done and variation orders as well as interest and costs.
The dispute between the parties was later referred to arbitration. The agreed settlement sum of RM4 million was reached after the Kuala Lumpur High Court dismissed Global Upline’s application to set aside the Arbitral Tribunal’s final award in favour of KKBB.
KKB said with the payment of RM4 million, Global Upline had fulfilled the terms and conditions of the amicable settlement reached with KKBB. “With that,the material litigation between both parties has been fully concluded. “The settlement sum is expected to have a positive impact to the group’s financial results for the financial year ending 31 December 2019,” said KKB.
