Muhibbah Awarded RM80m contract

Muhibbah Engineering (M) Bhd (“Muhibbah” or “the Company”) Award of Contract for the Proposed Redevelopment Project for Deepwater Facilities at Quay 6 (MMHE), Pasir Gudang, Johor

The Board of Directors of Muhibbah (“the Board”) is pleased to announce that the Company has been awarded a proposed redevelopment project for Deepwater Facilities At Quay 6 (MMHE), Pasir Gudang, Johor (“the Project”) by Malaysia Marine And Heavy Engineering Sdn Bhd ("MMHE") for a total contract sum of Ringgit Malaysia Eighty Million Three Hundred Thirty-Three Thousand (RM80,333,000) only.

The Project is scheduled to commence by end-April 2008 and is targeted for completion in October 2009.

Wondering if the rising material cost will squeeze up contructor's profit. Based on annual net profit margin of 6.29% in 2007, this RM80m will contribute about RM2.5m profit to 2008 and 2009 each, if the rising cost effect is thoroughly passed to the consumer. RM2.5m each year, perhaps it is a bit too little.

Noted from news that one of the major projects, SKVE may be postponed.