KNM to see core net losses for FY17-18

KUALA LUMPUR: KNM Group Bhd (KNM) is projected to have core net losses (CNLs) of RM7.7 million and RM5.1 million for financial year 2017 (FY17) and FY18 amidst unexciting work prospects.

According to the research arm of Kenanga Investment Bank Bhd (Kenanga Research), KNM’s performance was marred by slower replenishment of new orders, especially from the Americas as well as Asia and Oceanic segments, coupled with delay in its renewable energy projects.

Kenanga Research noted that KNM is working towards the commercial production of the group’s 72 per cent-owned ethanol plant by the second half of 2017 (2H17), which was delayed for more than a year.

“In early May this year, KNM kick-started its Impress Ethanol Plant (IEL) phase 2 project by awarding the EPCC work of 300,000 litre per day plant amounting to RM159 million to its own fabrication arm, bringing its total capacity to 500,000 litre per day,” the research arm said. “The phase 2 plant is slated for completion by 2H19.”

The research arm further noted that assuming 85 per cent utilisation on the 200,000 litres per day cassava-based bioethanol plant, it would generate earnings of circa RM15 million for 12 months of operations.

Kenanga Research gathered that KNM is still eyeing to secure the financing of circa 50 million pounds to commence the construction work.

“Meanwhile, KNM is also in the midst of seeking advice from consultants to review and upgrade the technology of the wasteto-energy plant, allowing it to take in more raw waste instead of sorted wastes,” it said.