Study Analysis for Construction Company
1. BACKGROUND 4
2. NON- FINANCIAL HIGHLIGHTS6
3.0 FINANCIAL HIGHLIGHTS7
4. FINANCIAL ANALYSIS (Based on ratios in Appendix II)9
4.1 MEASURES OF PROFITABILITY9
4.2 MEASURES OF SHORT TERM LIQUIDITY:-10
4.3 MEASURES OF LONG-TERM CREDIT RISK11
4.4 MEASURES FOR EVALUATING COMMON STOCK12
5. PERFORMANCE VERSUS INDUSTRY12
5.1 PERFORMANCE OF COMPETITORS12
5.2 OVERALL PERFORMANCE OF LLCB COMPARED TO GLOMAC BERHAD AND RANHILL CORPORATION.17 6. INVESTOR’S EXPECTATIONS.17
7. SUGGESTIONS FOR IMPROVEMENT18
APPENDIX II: FINANCIAL ANALYSIS RATIOS24
APPENDIX III: COMPARISON WITH COMPETITORS32
APPENDIX IV:PERFORMANCE VERSUS INDUSTRY35
LOH & LOH CORPORATION BERHAD (LLCB) is a company operating in the civil engineering construction industry. Financial Analysis is done on the company’s five-year performance. The first 3 years of the period are depressed, with a low in 2005. The reasons for this performance are the lack of projects in the industry. 2006 and 2007 see a reversal of fortunes under the Ninth Malaysia Plan (‘9MP’) as the government commits to increased spending on infrastructure.
A comparison is made of LLCB against competitors Glomac Berhad and Ranhill Corporation and the comparison shows that LLCB has a capable Board of Directors and is very strong on liquidity management as well as on keeping gearing low. However, LLCB is weak on managing profitability as well as Corporate Social Responsibility.
Against the industry as a whole, LLCB is a strong performer as it out-performs on most indicators. The future looks bright for the company.
LOH & LOH CORPORATION BERHAD (LLCB) started in the mid-1960s as a sole proprietorship founded by Mr. P.K. Loh. It was later incorporated in 1974 under its present name “Loh & Loh Constructions Sdn Bhd (“LLCSB”). Since then the company has grown to be a significant player in the country’s civil engineering construction industry, especially in construction and waterworks. LLCB has established a niche in the construction of dams. LLCB is an investment holding company and the main activities of its subsidiary and associated companies are in civil and structural engineering, mechanical and electrical engineering, building and other related construction works. (See Appendix I). On 2nd July 2001, LLCB acquired 100% equity in Water Engineering Technology Sdn Bhd ("WET"). WET is synergistic to the operations of the LLCB Group, as WET is primarily involved in Mechanical and Electrical Engineering focusing on water, wastewater and environmental sectors The group is led by a board of committed and experienced directors. The strengths of the group are experience, construction technology and know-how, cost efficiency, commitment to quality, association with foreign contractors and timely completion of projects. LLCB is the first construction company in Malaysia to be certified by Construction Quality Assurance Ltd., United Kingdom as having achieved ISO 9002 standards for its project management on building and civil construction works in 1997. This recognition certainly confirmed LLCB’s competency with other established British and European companies in the same industry. In the same year, LLCB was accredited with the MS ISO 9002 by SIRIM for provision of building and civil engineering construction services. Both certifications have been endorsed to this day. WET was also accredited with the ISO 9001:2000 by SIRIM in 2003. On 7 March, 1997 LLCB was listed on the Second Board of the Kuala Lumpur Stock Exchange. On 17 October, 2000 LLCB was transferred to the Main Board of the Kuala Lumpur Stock Exchange. The main Activities of LLCB are in Civil and Structural Construction and projects fall under the following categories; Dams and Waterworks -LLCB has constructed more than 10 Dams in Malaysia such as The Durian Tungall...