KUALA LUMPUR (Aug 27): Malakoff Corp Bhd (KL:MALAKOF) said on Tuesday that its wholly owned subsidiary Prai Power Sdn Bhd has received a one-year extension to its power purchase agreement (PPA) from Tenaga Nasional Bhd (KL:TENAGA).

According to a bourse filing, the PPA extension will commence on Sept 1, 2024, and expires on Aug 31, 2025.

Separately, Tenaga Nasional Bhd (KL:Tenaga), whose ring-fenced entity Single Buyer procures the electricity, said that the PPA has a one-year extension option.

In a sector note previously published by UOB Kay Hian, it was noted that the 350 megawatt (MW) Prai power plant accounts for 5% of Malakoff’s earnings before interest, taxes, depreciation and amortization (Ebitda).

UOB Kay Hian has forecasted that a two-year extension of Malakoff’s Prai power plant will provide RM100 million in annual cash flow to the company.

The group has four more power plants in the country, including its 1,303MW gas plant under Segari Energy Ventures whose PPA expires in 2027, 2,200MW Kapar Energy Ventures (expiring 2029), 2,100MW coal plant Tanjung Bin Power (expiring 2031), and 1,000MW coal plant Tanjung Bin Energy (expiring 2041).

The Prai power plant is one of two power plants which received PPA extension on Tuesday. The other power plant is a 710MW gas power plant belonging to Panglima Power Sdn Bhd, according to Tenaga's filing.

On Tuesday’s closing, shares in Malakoff closed down one sen or 1.1% to 87.5 sen, giving the company a market capitalisation of RM4.38 billion. The stock is up 41% year-to-date and pays an indicative dividend yield of 3.4%.