PublicIn­vest main­tains ‘out­per­form’ on Malakoff

New Straits Times - - Business -

KUALA LUMPUR: Malakoff Corp Bhd’s re­cent earn­ings re­sult is in line with Pub­lic In­vest­ment Bank Bhd’s es­ti­mates as the bank is ex­pect­ing lower con­tri­bu­tion from Se­gari En­ergy Ven­tures (SEV) due to lower lev­el­lised tar­iffs from the sec­ond half on­wards.

“The first-quar­ter (1Q) fi­nan­cial year (FY) 2017 rev­enue was RM1.78 bil­lion com­pared with RM1.34 bil­lion in 1QFY16, ac­count­ing for 28.9 per cent and 28 per cent of our and con­sen­sus full-year es­ti­mates, re­spec­tively.

“There was no div­i­dend de­clared for the pe­riod un­der re­view. We main­tain our “out­per­form” call on Malakoff with un­changed tar­get price of RM1.61,” said PublicIn­vest yes­ter­day.

Malakoff ‘s net profit rose 17.5 per cent to RM98.8 mil­lion from RM84.1 mil­lion a year ago for the first quar­ter ended March 31, on a higher fuel mar­gin and higher con­tri­bu­tion from its as­so­ciates.

Fur­ther, the in­vest­ment bank said higher first quar­ter rev­enue was due to con­tri­bu­tion from Tan­jung Bin En­ergy (TBE).

“Ca­pac­ity pay­ment in­creased by 22.7 per cent year-on-year due to full con­tri­bu­tion from the TBE plant com­pared with only 10 days’ con­tri­bu­tion in the same quar­ter last year.

“Nev­er­the­less, quar­ter-on­quar­ter num­bers were slightly lower by 1.9 per cent to RM683.3 mil­lion due to low de­mand from the Grid Sys­tem Op­er­a­tor, which favoured new and more ef­fi­cient plants in the north­ern re­gion,” it said.

On prospects for the rest of the year, Malakoff cau­tioned that the re­sults for FY17 will be af­fected by the ex­piry of its ex­ist­ing Se­gari En­ergy Ven­tures Sdn Bhd power pur­chase agree­ment (PPA) next month.

“The new SEV PPA, which will take ef­fect upon ex­pi­ra­tion of the ex­ist­ing (one), stip­u­lates lower lev­el­lised tar­iffs com­pared with the ex­ist­ing agree­ment,” it noted.

“Not­with­stand­ing this, the group is con­tin­u­ing with its strate­gic ini­tia­tives to se­cure growth op­por­tu­ni­ties in the power sec­tor, as well as to broaden its earn­ings base in com­ple­men­tary busi­ness sec­tors for the fu­ture.

“In ad­di­tion, the group is fo­cus­ing on en­hanc­ing ef­fi­cien­cies through­out its op­er­a­tions, and hence ex­pects the re­sults to re­main pos­i­tive for FY17,” said Malakoff in a fil­ing with Bursa Malaysia. Za­rina Zakariah


Malakoff Corp is con­tin­u­ing strate­gic ini­tia­tives to se­cure growth op­por­tu­ni­ties in the power sec­tor.

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