SINGAPORE (Apr 20): Mainboard-listed TEE International’s wholly-owned subsidiary Trans Equatorial Engineering has bagged a letter of award (LOA) worth $72 million for mechanical and engineering works for the proposed development of a sports and recreation centre in Punggol.
The LOA was awarded to the group by repeat client Hyundai-Keong Hong JV Limited Partnership, a joint venture between Hyundai Engineering and Construction (Singapore) and Keong Hong Construction, a wholly-owned subsidiary of Keong Hong Holdings.
The partnership between the duo was announced on Jan 21 when Singapore Sports Council awarded the construction contract worth $306.6 million to Hyundai.
Hyundai and Keong Hong Construction had submitted a joint tender and formed a JV for the construction project, with both parties expressing intention to transfer the main contract from Hyundai to the JV.
TEE says the mechanical and engineering works are expected to be completed by 1QFY2023 barring unforeseen circumstances such as project delays due to the Covid-19 pandemic.
Including the LOA, the group’s order book stands at $298 million as at end-February.
“With the increasing challenges imposed by the Covid-19 pandemic, TEE will continue to work closely with our clients and partners for the smooth execution and delivery of this project in accordance to the authorities’ guidelines,” says interim group chief executive Eric Phua.
Although the LOA is welcome news for TEE, the group has sounded warnings about “significant disruptions” to its business and operations brought about by the circuit breaker measures implemented by the Singapore government.
These measures have resulted in the suspension of most of the construction works for the group’s ongoing projects, as well as the closure of its construction sites.
The group says that this will have an adverse impact on its profitability for the financial year ending May 31, 2020
“All our construction projects have been suspended except for three projects under the construction and critical public infrastructure, whereby only essential services are
being carried,” says Phua.
Phua adds that including the group’s subcontractors, the current workforce at these sites have been reduced to 30%.
Shares in TEE International closed 0.1 cent higher, or 4.4% up, at 2.4 cents on Monday prior to the announcement.
