Strong wind in its sails

EVERSENDAI Corp Bhd recorded an historical high in its revenue and bottom line for the financial year ended December (FY25). And it remains optimistic about its outlook for this year.

The feeling has been buoyed by a RM4.6bil order book. The group also saw a near 30% rise in its share price year-to-date up to the final week of February when it touched 54 sen, before it retreated after news broke about the attack on Iran.

While entities with overseas operations are bound to be affected by the ongoing conflict, the flare-up in hostilities reverberates with the company as much of its projects are in the Middle East.

Eversendai founder, group managing director and executive director Tan Sri Nathan Elumalay says that all Eversendai employees in the United Arab Emirates (UAE), Qatar, Kuwait and Saudi Arabia are “safe and well”.

“All factories and project sites remain operational. However, office staff are working from home until the end of this week as a precaution,” he says.

Nathan reports that Eversendai does not have any ongoing projects in Kuwait or Doha, although the group has two projects nearing completion in the UAE.

It also has two more projects in Saudi Arabia, which are located further away from Iran, hence operations have not been disrupted.

Nathan says: “We remain hopeful that the situation will de-escalate in the coming days.”

Moreover, he says Eversendai’s order book means the group has work to last until the end of next year, while it continues to bid for more. He also reiterates his confidence that 2026 should see more improvement.

That would be no mean feat, as the group posted top line and net profit of RM2.14bil and RM110.4mil, respectively, for FY25. This translates to a revenue growth of 71.1% year-on-year (y-o-y), while the bottom line has jumped more than eight-fold.

In its bourse filing, the group merely commented that the surge was primarily due to “all ongoing projects progressing as per schedule, continuous efforts to reduce operating expenses, reduced finance costs and foreign-exchange (forex) gains.”

Nathan says Eversendai had been adversely affected by the Covid lockdowns, which saw the company lose significant revenue as some of its clients went bankrupt or were unable to pay up.

“Over the last three years, we have been working hard to rebuild positive numbers and we managed to secure a number of contracts. Two years ago, we had our largest ever order book of approximately RM6.7bil, and today we have RM4.6bil still in hand,” he says.

In addition, he says the group’s long-term prospects remain in the Middle East, which could still offer many projects for the structural steel contractor, although he feels Saudi Arabia is slowing down to focus on necessary construction that truly serves its national interests.

Middle East remains core focus

What does the group think about its Malaysian prospects?

After all, over the past 30 years, it has been heavily involved in structural steel works for notable local buildings such as Tower 2 of the PETRONAS Twin Towers, the Main Terminal building of the Kuala Lumpur International Airport, and the Putrajaya Convention Centre.

Nathan says Eversendai has been in the Middle East for three decades, beginning in 1994 when it was awarded a contract for the structural steel erection works for Dubai’s famous Burj Al Arab.

Thereafter, the group was awarded the structural steel erection works for the spire of the Burj Khalifa, the world’s tallest building in 2007, while also securing multiple structural steel packages in Saudi Arabia’s NEOM region, including Trojena Ski Village, Sindalah Island, and consultancy services for The Line, a 170-km-long linear smart city which is still under construction.

While he acknowledges there are many projects also propping up in the UAE, Nathan foresees a significant amount of development going forward for wind farm projects, especially in the United Kingdom and continental Europe.

The group had been awarded the contract to supply key steel foundation and support structures for the Seagreen Offshore Wind Farm in the North Sea off the coast of Scotland back in 2020, with Nathan emphasising that Eversendai will continue to bid for jobs in this sector.

“We are looking to elevate the company to become an engineering, procurement and construction or EPC solutions provider in the wind farm sector in the next two to three years,” he remarks.

Nathan says the group is looking at mechanisms to incorporate dividends for shareholders, despite acknowledging that losses accumulated during the lockdown years have not allowed Eversendai to transform into a dividend-paying entity as yet.

Nathan says he still adopts a hands-on approach, being readily available for clients if he is needed, even though the group now employs a workforce of 15,042-strong in order to cater to its growing order book, with 3,000 engineers among them.

He says: “During the lockdown period, we had to cut down our manpower to about 9,800. But with job orders now being secured, we are bringing the number of staff back up.

“Moreover, we will be reinvesting our revenue into the business and not exposing ourselves to a high level of gearing.”

Commenting further on the group’s prospects, he says the fact that Saudi Arabia is looking to transform itself into a tourism and entertainment hub bodes well for the group, especially as the oil-rich nation begins to adopt a more staggered building strategy.

“This means our work orders would be stretched over a longer term, offering us better earnings visibility,” he says.