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Malakoff plans to expand RE business, venture overseas -- CGS-CIMB

KUALA LUMPUR, Nov 25 -- Malakoff Corporation Bhd aims to expand its waste management business by venturing into waste-to-energy (WTE), biogas and biomass power plants, with participation in the Large-Scale Solar 4 and Johor’s WTE plant bids this year.

CGS-CIMB, in a company note today, said Malakoff plans to build up its renewable energy (RE) capacity again post the disposal of its entire 50 per cent stake in the 420MW Macarthur Wind Farm in 2019.

“The company is not ruling out the possibility of exploring overseas opportunities,” it said.

The plan, it also said, was the company's strategy to focus on RE projects, in line with the government’s aim of raising the proportion of RE to 20 per cent of Malaysia’s total energy generation mix by 2025.

Moving forward, the research house foresees stronger earnings in the financial year ending Dec 31, 2020 (Q4 2020F) compared with the third quarter ended Sept 30, 2020 (Q3 2020).

On the results released yesterday, Malakoff’s net profit for Q3 2020 fell to RM50.80 million from RM94.49 million in the same period last year, while revenue for the quarter under review decreased 20.2 per cent to RM1.48 billion from RM1.86 billion a year earlier.

Weaker revenue was mainly due to lower energy payment recorded from Segari Energy Ventures Sdn Bhd, given the lower dispatch factor, as well as from Tanjung Bin Power Sdn Bhd and Tanjung Bin Energy Sdn Bhd following the decline in applicable coal price.

“We lift our FY20-22F earnings per share estimates by 11 to 13 per cent to factor in higher contributions from associates or joint ventures.

“We reiterate its “add” rating, given its improving earnings profile due to additional profit contribution from Alam Flora and lower finance cost; less stretched balance sheet; and its dividend yield of over seven per cent for FY20-22F,” it added.

-- BERNAMA

 

 

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