PETALING JAYA: Lafarge Malaysia Bhd's RM270 million contract for the supply of cement for the East Coast Rail Link (ECRL) has been suspended following the suspension of the project.
In a filing with Bursa Malaysia yesterday, Lafarge said it received a letter from China Communications Construction (ECRL) Sdn Bhd on the suspension of the company's supplies with immediate effect until further notice.
Lafarge does not expect the suspension to have any significant financial impact on its operations and financials in the financial period up to date of the suspension, as completed work will be compensated for in accordance with the contract.
However, for the period subsequent to the suspension date, the company will only be able to assess the actual financial impact upon receipt of clear direction from the client and/or Malaysia Rail Link Sdn Bhd after the government's review of the ECRL project is completed.
"In the event the suspension of the contract is lifted, it is expected for the contract to contribute positively to the earnings of the Lafarge Malaysia group for the financial year ending Dec 31, 2018 and the financial period thereafter within the duration of the contract," it said.
In March, Lafarge's wholly owned subsidiary Lafarge Cement Sdn Bhd and China Communications Construction entered into a contract for the supply of cement for all eight packages of work for the ECRL.
On Bursa Malaysia yesterday, Lafarge rose 2.35% or 7 sen to close at RM3.05 on volume of 221,600 shares.