It certainly makes business sense for Nepco to get electrical power from APCO as it is billed in local currency and at fixed rates which are lower than power generated with imported fuel at elevated prices
They are making some little noise just to hope for a lower tariff from APCO, but they have no leverage nor bargaining power as the alternative is to use imported gas or oil which are expensive. Gas supply there is not reliable as the main gas supply pipeline is often sabotaged
The cancellation of Tanjung Jati A project is well expected as I explained earlier, as it is now difficult to get international financing to support new coal-fired power plant project. I think YTLP has already made some provisions in the June qtrly result to write off some development costs related to this TJ project.
The Singapore business (now under power generation segment) has shown good results. However I'm less sure about two other items. One is that the telco business continues to bleed. PBT loss was RM84m in current quarter. Anyway the underperfoming telco has been discussed before.
A new concern for me is finance cost has increased from RM240m a year ago to RM332m in the current quarter. Given the amount of borrowing (borrowings on the balance sheet are about RM2.8 billion), a substantial portion of the operating profit has been eaten up by interest payment.
Is the borrowing a bit too much given the rising interest rate? With hindsight should the proceeds from ElectraNet sales be used to pay down borrowing instead of getting into new projects?
Does it also mean the company is unlikely to raise dividend any time soon due to the heavy burden of interest payment?
Contribution from PowerSeraya is encouraging, and there was no big negative surprise from Wessex with a small net profit.
On interest expenses, I agree with Observatory that this is sounding little alarm as it went up from RM240m last year quarter to RM332m in this Q1FY2023.
I see that total borrowings remained about RM28 billion as of 30 Sept 2022 while cash holdings increased slightly from last year. Most of these borrowings (estimated 2,315 million pounds or RM12.3 billion) sit at Wessex Waters level. We all know that the interest rates in the UK has gone up a lot recently to 3.0% in Nov from 0.2% last Nov. A 2.8% increase in interest rates will have resulted in RM12.2 bn x 2.8% /4 = RM85 million of increase in interest rate expenses. The rest of the interest expense increase was due to small rise in PowerSeraya.
A good thing is that interest rate hikes in the US and UK are set to slow down going forward.
The increase in interest rates will be compensated by higher water tariffs from next regulatory year from Apr 2023, so Wessex Waters just have to live with high interest expenses for next few months.
YTL Power had cash holdings of RM7.4 bn as of 30 Sept 2022, so net debts amounted to RM28bn - RM7.4bn = RM20.6 bn.
An estimated debt of RM12.2 bn sat in Wessex, RM7.0 bn in PowerSeraya, RM1.5 bn in Jordan Power, so net debt in YTL Power amounted to RM20.6b - 12.2 - 7.0 - 1.5 = -RM0.1 bn or a nett cash position of RM100 million.
Operating cashflows amounted to about RM494 million for this Q1, minus capex RM383m, there were still positive free cashflows of some RM111 million per quarter or RM444 million per year or 5.4 sen per share.
Operating cashflows should increase in following quarters as PowerSeraya reports stronger earnings and Wessex enjoys higher water tariffs from Q4FY2023, I think.
So I think YTLPI still has capacity to declare dividend of 5.0 sen min for FY2023.
From April 2022 our charges increased by around 4.5% compared to last year, for a customer receiving both water and sewerage services. Charges applicable from 1 April every year are published by 1 February.
We are now in the process of preparing our charges which will apply to bills from 1 April 2023. These charges will be confirmed on our website by 1 February 2023. Unfortunately, our prices will be increasing again largely due to high inflation.
@dragon328 The arbitration case still not ended, BUT through the flow of the case, APCO have higher possibility will win this case. And the market (IMF) is assuming NEPCO have to carry out his own responsibility.
Sooner or later, if you notice that YTLP share price suddenly shoot up 10-20 sens in a day which happened before, it possibility means that the case is finished.
From what im notice is, the market give this stock around 7% DY.
If the dividend given is 4.5 sens, the share price will fall around 65 sens. If the dividend given is 5 sens, the share price will fall around 70 sens. If the dividend given is 5.5 sens, the share price will fall around 78 sens. If the dividend given is 6 sens, the share price will fall around 85 sens. If you want the price shoot to RM 1, the dividend given should be around 7 sens.
i guess HLB is estimating this shock will provide 7 sens dividend in coming year.
YTL JV with Strides Mobility, together with Airetec and Yes Energy formed a consortium that won a tender from the Land Transport Authority (LTA) to install, operate and maintain electric vehicle (EV) chargers charging points at Housing & Development Board (HDB) carparks in the Central and East regions of Singapore
Singapore plans to import up to 4GW of low-carbon electricity by year 2035F or about 30 per cent of its total supply.
YTL Power Seraya in Singapore has been selected for a two-year trial to import 100 megawatts (MW) of electricity from Peninsular Malaysia. YTL Power acquired 664 hectares (ha) of oil palm estates in Kulai, Johor from Boustead Plantations to develop the land into a large scale solar power plant with a generation capacity of up to 500MW. The first 100MW generate from these solar farm will be ready by end 2023 and start trial to export these low carbon electricity to Singapore by early 2024.
YTL Data Centers is the digital infrastructure arm of YTL Power International Berhad, which is headquartered in Malaysia and listed on Bursa Malaysia.
Supported by a diverse network of experts with both global and local expertise, we build data centres designed to optimise energy efficiency, scalability and reliability.
To enable the sustainable growth of today’s data-driven world, we have a goal to power our data centres across the South East Asia region with 100% clean and renewable energy.
This starts with our bold vision to build a Green Data Centre Park in Johor, Malaysia, which will be powered by up to 500MW of renewable energy through solar farms planted within the site.
YTL’s Johor Data Center 1 is located in the Iskandar region in Johor, Malaysia. It is a 530,000 sqft development, power by 72MW solar capacity. The first data center is 3-storey building consists of 2 wings of Data Hall suites and M&E rooms. It has 8 Data Hall suites spread over 2 wings per floor (total of 24 Data Hall suites). The Data hall is use for provision of onsite office space, storage and parking facilitie.
YTL data center also partner GDS Holdings Limited co-develop 168MW of data center capacity, across 8 individual data center facilities, at the upcoming YTL Green Data Center Park in Johor, Malaysia. The first phase of the co-development will enter service in 2024.
The 500MW solar power generate aside use to supply green energy to power up initiate 72MW + 168MW Data center, it also use 100MW to export to Singapore under 2 year pilot green power supply agreement with Singapore
@dragon328, hopefully FY2024 will be boosting year for YTLP. 5% DY is achievable provided the company keep increase their net profit. 10 sens of dividend, is very possible for YTLP, if with the aid from APCO and DC.
Yes xiaochen, we can certainly look forward to at least 7.0 sen dividend from FY2024.
This is after Wessex water tariffs start to reflect the higher inflation and higher interest rates from 4QFY2023 onwards, and PowerSeraya continues reporting strong earnings due to tight supply market in Singapore.
The Star article reported that Wessex would report higher revenue of RM257 million in 2023, that would flow directly into the bottom line.
YTLPI reported a tiny earnings contribution of RM20m pretax profit from Wessex in its Q3FY2023. Imagine that from Q4FY2023 Wessex shall report RM257m/4 = RM64 million of extra profit, quarterly PBT contribution from Wessex shall increase back to the "normalised" RM80-90 million per quarter.
Add the RM289m PBT contribution from PowerSeraya, PBT shall top RM300m per quarter if we allow continued RM70m loss for the telco business. Annualised pretax will come to RM1.2 billion and net profit may come to RM900 million or EPS of 11.0 sen
I think the management will be very generous in dividend payout from FY2024, it should be over 70% payout, or at least 7.7 sen dividend from FY2024.
In fact, operating cashflows will be stronger than the projected RM900m net profit as we add back depreciation charges, but we need to set aside RM750m - 900m capex for each year mainly for the development of green data centre and solar farm installation, so free cashflows may come back to RM900-1,000 million.
@10bagger10, I am no sifu, just a retail investor who spends more time in studying these companies' businesses and financials.
To me, YTL Corp is more undervalued in the longer term as it owns stakes in YTL Power, YTL REIT, Singapore Starhill REIT, the largest tract of urban land in KL Sentul, the largest tract of land in Japan Niseko, the largest cement company in Malaysia with dominant 67% market share. But some of these assets take longer time to realise their potential, eg. Niseko land and Sentul land. The immediate catalysts are expanding earnings from YTL Power and MCement.
YTL Power will give you higher dividend yield in near term, which may be as high as 10% from FY2024, as its PowerSeraya multi-utilities business is already reporting exponential growth in earnings and strong cashflows.
Next for YTLPower will be for Wessex to report normalised earnings from Q4FY2023 and for its green data centre to start contributing meaningful earnings from Jan 2024.
@dragon328, HLB didn't mention about the exact dividend, im just assuming HLB is estimating 7 sens divident through 7% DY of their target price for YTLP. So, dont be too serous, you didnt miss anything from their analyst report.
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