KUALA LUMPUR: Kumpulan Perangsang Selangor (KPS) Bhd will supply various water treatment chemicals to Pengurusan Air Selangor Sdn Bhd for two years, effective January 1, 2024, with an estimated contract sum of RM162.181 million.
KPS told the stock exchange today that its 51 percent-owned subsidiary, Aqua-Flo Sdn Bhd (AFSB), entered into a framework agreement (FA) with Air Selangor on November 21, 2023.
The commencement and duration of the supply will be for a period of two years, starting from January 1, 2024, until December 31, 2025.
Air Selangor and AFSB 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.
KPS said that 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 AFSB.
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 that there are risks associated with the contract, such as fluctuations in foreign currency against the Ringgit Malaysia, 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