Tasek expects growth as market stabilises

Tasek Corporation Bhd expects a five per cent growth in revenue for the financial year ending June 30, 2006 from RM224.47 million in the previous year as the local cement market has stabilised and the construction sector is set to receive a boost from Budget 2006.  Speaking to reporters after the company’ AGM in Sungai Buloh on Oct 26, its executive director Datuk Teo Tong Kooi said: “he outlook for the cement industry as a whole is good. The price of cement has stabilised and the latest budget has lots of infrastructure projects.”

Earlier this year, a price war between cement producers through rebates and other concessions had caused the price of cement to drop, squeezing their margins.  Tasek posted a net loss of RM10.69 million for the financial year ended June 30, 2005, which Teo said was partly a result of the price war. 

He said the company’ revenue prospects should improve now that there was no longer a price war and the price of cement had stabilised to the normal level.  On Oct 26, Tasek announced a revenue of RM74.16 million for the first quarter ended Sept 30, 2005, up 12 per cent from a year ago. However, net profit was 23.4 per cent lower on-year at RM6.99 million.