Cypark’s 1Q net profit rises 6% y-o-y on lower tax expenses, but down 39% q-o-q

KUALA LUMPUR (March 31): Cypark Resources Bhd’s net profit for the first quarter ended Jan 31, 2022 (1QFY22) increased 5.56% to RM15.82 million from RM14.98 million in the same quarter last year, on lower recognition of deferred tax expenses.

The environmental solutions and renewable energy group posted a 0.95% increase year-on-year (y-o-y) in its quarterly revenue to RM77.2 million from RM76.48 million on better performance in its renewable energy (RE) division.

On a quarter-on-quarter (q-o-q) basis, Cypark’s net profit dropped 38.51% from RM25.72 million as revenue declined 11.21% from RM86.95 million in 4QFY21. This was due to lower work activities amid the recent surge of Covid-19 infections at project sites which caused disruption of manpower, and inclement weather which affected the sites’ condition and onsite working hours.

The government’s determination to boost usage of RE, as the previous target of 20% RE adoption by 2025 has been revised to 31%, is in line with its commitment to the 2012 Paris Agreement, noted Cypark in a bourse filing.

It said this is a great incentive for RE players like Cypark to contribute towards the acceleration of Malaysia’s adoption of green energy, including solar energy.

“With the increase in the RE adoption target, Cypark expects a sizeable solar quota to be offered by Suruhanjaya Tenaga through LSS5 tender and beyond in which Cypark will participate accordingly,” it said.

As the government focuses on green economy, recycling of waste and implementing a circular economy towards a more sustainable future for Malaysians under the 12th Malaysia Plan, Cypark believes that there is big potential for growth in waste-to-energy (WTE).

“In this respect, the continuous effort of the government under the Ministry of Housing and Local Government in inculcating greener ways for waste management could result in more WTE plants being built in the future.

“Out of the five potential new WTE tenders that were highlighted, Cypark has participated in two WTE tenders in Johor and Malacca in collaboration with Johor and Malacca state-owned companies,” it said.

Moving forward, Cypark believes its outstanding track record in designing, constructing, owning, and operating the country’s first WTE plant in Ladang Tanah Merah, Negeri Sembilan could stand the group in good stead to win more WTE projects in the future.

At Thursday’s (March 31) noon break, Cypark shares were 0.62% or half a sen higher at 81.5 sen, giving the group a market capitalisation of RM483.11 million.