Loss-making Advancecon diversifies into property business

• This partnership follows the success of two CLQ projects in Ipoh. 

KUALA LUMPUR (Aug 27): Earthworks group Advancecon Holdings Bhd (KL:ADVCON) has announced plans to diversify its business by expanding property development, investment, and management as it sees the segment contributing more than a quarter of group revenue.

In a filing with the stock exchange, Advancecon said it has initiated several strategic initiatives, including forming public-private partnerships and collaborating with state development agencies. 

These efforts aim to venture into the refurbishment, renovation, and management of centralised labour quarters (CLQs) in Perak, as well as the development of property projects within the Silver Valley Technology Park Industrial Hub (SVTP Industrial Hub).

In July this year, Advancecon formed a 70:30 joint venture with a unit of Perak state government-linked Perak State Development Corporation (PKNPK) to carry out strategic developments of CLQs. This partnership follows the success of two CLQ projects in Ipoh. 

Advancecon said it has identified several strategic locations for the development of CLQs on land owned by PKNPK, including a 15.117-acre parcel of leasehold land in Seri Iskandar and a 3.776-acre parcel in Kamunting.

The planned CLQ developments aim to accommodate up to 12,000 workers.

In January this year, a unit of Advancecon entered into a joint development agreement with Perak Corp Bhd (KL:PRKCORP) for the main infrastructure development of the 746.73-acre SVTP Industrial Hub in Kinta.

Aside from earthworks and property business, Advancecon also invests in solar projects, and manages a quarry operation.

Advancecon has been a loss-making company since the financial year ended Dec 31, 2022 (FY2022). For the first quarter ended March 31, 2024, the group reported a net loss of RM14.52 million, compared to a net profit of RM148,000 in the same period last year. The losses were primarily driven by higher costs in the construction segment. During the same period, revenue decreased by 16.12% to RM93.97 million from RM112.03 million.

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