Malakoff's 3Q profit jumps 53% on higher energy payments from power plants

TheEdge Tue, Nov 29, 2022 08:38pm - 1 year View Original


KUALA LUMPUR (Nov 29): Malakoff Corp Bhd’s net profit for the third quarter ended Sept 30, 2022 (3QFY2022) jumped 53.44% to RM66.54 million from RM43.37 million in the same quarter last year, boosted by higher contribution from Tanjung Bin Power Sdn Bhd (TBP) on the back of higher applicable coal price (ACP).

Revenue climbed to RM3.18 billion from RM1.58 billion in 3QFY2021, its Bursa Malaysia filing showed, with the higher ACP increasing the contributions from both TBP as well as Tanjung Bin Energy Sdn Bhd (TBE). It recorded a tax expense of RM155.97 million, as opposed to RM45.85 million previously.

Earnings per share for the reporting quarter expanded to 1.36 sen from 0.89 sen. No dividend was declared.

In a statement, Malakoff said the significant increase in its net earnings was partly offset by lower contribution from TBE as a result of a reduction in capacity income. "In addition, higher operating insurance and impairment loss on the carrying value of the group's investment in Al-Hidd Independent Water and Power Plant also impacted overall net earnings," it said, referring to its 40%-owned foreign associate in Bahrain.

It also noted that its environmental solutions business under Alam Flora Sdn Bhd registered a 14.2% decrease in profit after tax and minority interests of RM24.8 million during the reporting quarter, versus RM28.9 million in 3QFY2021, due to higher fleet maintenance costs and the absence of reversal of accruals for certain subcontractor costs in relation to its concession contracts, which was recorded in the previous quarter.

For the first nine months of FY2022, Malakoff's net profit rose 7.58% to RM213.16 million from RM198.14 million in the same period in FY2021, as cumulative revenue jumped 63.35% to RM7.38 billion from RM4.52 billion. Tax expense nearly doubled to RM248.55 million from RM128.41 million.

Looking ahead, Malakoff managing director/chief executive officer Anwar Syahrin Abdul Ajib is optimistic about putting forth the group's sustainability agenda to support the government's commitment to environmental sustainability, based on the latter's National Energy Policy 2022-2040 released in September that outlined key priorities for the energy sector in the coming years.

"With this, Malakoff continues to advance the transition to cleaner energy while exploring various strategies to significantly reduce our carbon footprint. While our growth in the solar sector has been highly encouraging, we are also exploring decarbonisation efforts at our thermal assets through hydrogen/ammonia and biomass co-firing,” he added.

According to the group, which expects its overall performance for FY2022 to remain satisfactory, it has to date achieved commercial operations for rooftop solar projects with a capacity of 20.6 MWp to date, and is well positioned to expand further on similar renewable energy projects in the solar space.

Meanwhile, Alam Flora had, in October, established a 3.64-ha inert waste management facility in Kuantan to manage waste from construction, renovation and demolition of buildings or premises in the district. "This green initiative facility is estimated to manage a waste volume of 120 to 170 tonnes per day and will be key in maintaining Kuantan’s environmental sustainability."

Malakoff’s share price finished unchanged at 64 sen on Tuesday, bringing the group a market capitalisation of RM3.2 billion.

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