KUALA LUMPUR: Kumpulan Perangsang Selangor Bhd (KPS) has secured a contract with an estimated sum of RM162.181 million to supply various water treatment chemicals to Pengurusan Air Selangor Sdn Bhd for two years, effective Jan 1 next year.
KPS told the stock exchange yesterday that its 51 per cent-owned Aqua-Flo Sdn Bhd had signed a framework agreement (FA) with Air Selangor on Nov 21.
The supply order will be for two years until Dec 31, 2025.
Air Selangor and Aqua-Flo may also renew the FA for further terms to be mutually agreed upon, giving not less than one month's notice in writing prior to the expiry of the contract period, KPS said.
Aqua-Flo is a trading company offering chemicals and equipment, as well as provision of technical services in the water, waste and sewage treatment industries.
KPS said the contract is regarded as a recurrent related party transaction of a revenue or trading nature that is necessary for the day-to-day operations and is in the ordinary course of business for Aqua-Flo.
Under the FA, the estimated contract sum is based on approximate quantities, and the actual total quantities to be supplied shall be based on the purchase orders issued by Air Selangor.
KPS said there are risks associated with the contract, such as fluctuations in foreign currency against the ringgit, chemical product prices and material supply.
Nevertheless, it expects the contract to contribute positively to the group's earnings and net assets for the two-year period.
For the first half of 2023, KPS recorded revenue of RM576.5 million compared with RM654.7 million in the corresponding period last year. This represented a 12 per cent decrease due to lower contribution in its manufacturing business sectors.
The group's net profit for the first six months of the year fell 54 per cent to RM9.7 million from RM21.1 million achieved in the same period last year
