Malakoff’s 1Q net profit down 16% y-o-y, despite higher revenue

KUALA LUMPUR (May 24): Malakoff Corp Bhd’s net profit for the first quarter ended March 31, 2022 (1QFY22) fell by 15.82% year-on-year (y-o-y) to RM50.88 million, from RM60.44 million.

The lower net profit was due to lower contribution from Tanjung Bin Energy Sdn Bhd (TBE), resulting from the plant outage caused by low-pressure turbine blade failure, coupled with higher depreciation charges, according to the company’s filing with the bourse on Tuesday (May 24).

As a result, earnings per share decreased to 1.04 sen, from 1.24 sen previously.

In contrast, its quarterly revenue grew 39.42% to RM1.88 billion, from RM1.35 billion. The increase in revenue was primarily due to higher energy payments recorded from Tanjung Bin Power Sdn Bhd and TBE, given the higher Applicable Coal Price during the period under review.

In a separate statement, Malakoff said its overseas investments achieved a share of profit totalling RM47.4 million, an increase of 70.5% from RM27.8 million registered in the same quarter in the previous financial year. This was primarily attributable to the Al-Hidd and Shuaibah International Water and Power Plants in light of favourable gas margins and lower plant outages.

Malakoff managing director/chief executive officer Anwar Syahrin Abdul Ajib said the group remains optimistic of its performance for the rest of the year, as aggressive expansion in the renewable energy space is already in the pipeline, together with focused growth in the environmental solutions' non-concession segment.

“The group recognises the importance of embedding an Environmental, Social and Governance (ESG)-driven action plan into its work streams, which subsequently will enable a low-carbon, resource-efficient sustainability agenda to unfold new revenue opportunities in RE and the Environmental Solutions sphere. This is crucial as we embark on our journey towards achieving Net Zero Carbon Emissions by 2050.

“On March 25, 2022, the group achieved a key milestone in its sustainability journey by signing a memorandum of understanding with ITOCHU Corporation, one of the largest globally integrated companies, to conduct a feasibility study on decarbonisation via the utilisation of hydrogen/ammonia in the state of Johor. This can result in a huge potential for the development of an ammonia receiving terminal for co-firing/hydrogen usage at our power plants, as well as opportunities for bunkering and supply to the industrial complex nearby,” he added.

To date, rooftop solar projects with a total capacity of 11 MWp have commenced operations, as Malakoff makes steady progress in advancing the country’s transition to green energy sources. The group’s solar portfolio currently stands at 39 MW, translating to a total carbon avoidance of 30,601 MT/year.

On the environmental solutions front, Malakoff said its subsidiary Alam Flora Sdn Bhd has completed the physical works of its 120-tonne per day construction and demolition landfill Facility in the state of Pahang. The facility is expected to commence operations in the second half of 2022.

Malakoff shares closed down 1.5 sen or 2.34% at 62.5 sen on Tuesday (May 24), valuing the group at RM3.12 billion. Since the beginning of the year, the stock has fallen 13.19% from 72 sen.