CYPARK RESOURCES BHD

CYPARK Resources Bhd posted a RM16.5mil net profit in the third quarter FY17. Year-todate (YTD), nine-month FY17 net profit was flat – 1.7% year-on-year (y-o-y) at RM39.4mil, mainly due to one-off employee stock option scheme (ESOS) expense recognised in Q2.

Excluding the ESOS, Public Investment Bank (PIVB) said Cypark’s YTD net profit jumper 15.2% y-o-y to RM44.7mil due to higher contribution from environmental engineering (EE) segment.

“This, however, is below our expectation but within consensus expectations at 66% and 78% of net profit estimates respectively.

“The main discrepancy is mainly from higher-than-expected cost of sales. We raise our cost of sales assumption and as a result, our earnings forecast for FY17 is reduced by 14%,” the house said.

Nevertheless, PIVB maintained its forecast for FY18-FY19, which is expected to improve on the back of additional income from the sale of 25MW biogas and biomass.

Revenue wise, PIVB said nine-month FY17 revenue was up 10.3% y-o-y to RM177.4mil, mainly driven by higher contribution from its EE-related division, which is due to higher construction revenue from WTE.

Nonetheless, PIVB said this was partially off-set by lower landscaping and infrastructure segment, which declined by 41.1% y-o-y to RM21.5mil, as certain projects have been completed. New projects was still at the early stage of preliminary works.

PIVB noted that better contract rates for the maintenance works on leachate treatment plants in several landfills have improved Cypark’s maintenance segment by 52.3% to RM2.5mil.

Revenue for its green tech and renewable energy segment in third quarter FY17 improved by 13.9% y-o-y to RM14.1mil, due to higher tipping fees from landfill operation at Ladang Tanah Merah.

However, YTD was flat at RM36.1mil (1.6% y-o-y) due to lower revenue from solar in Q2 period.