PETALING JAYA: Despite the high inflationary environment coupled with a labour shortage, Sunway Construction Group Bhd (SunCon) is likely to achieve its management’s 5% to 8% earnings before interest and taxes or Ebit margin guidance for 2022, as prudent recognition from jobs reaching completion should see upward revision upon account finalisation, says Kenanga Research.
“The margin compression from high building material costs and labour shortages will be supplemented by upward margin adjustments for contracts completing this year upon account finalisation, given that SunCon has been prudent with margin recognition for ongoing projects all this while,” said the research unit.
Kenanga Research also noted that SunCon was suffering from a severe labour shortage, with only 260 direct workers compared with 800 at the peak and 500 during the pandemic stage.
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