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Monday, February 20, 2017

Malakoff 4Q net profit falls 15% on depreciation of gas-fired plants

By Samantha Ho / theedgemarkets.com | February 20, 2017 : 3:01 PM MYT

KUALA LUMPUR (Feb 20): Malakoff Corp Bhd posted a 15.01% lower net profit of RM90.23 million or 1.80 sen per share in its fourth quarter ended Dec 31, 2016 (4QFY16) compared to RM106.17 million or 2.12 sen per share in the previous corresponding quarter.

"The drop in profit after tax and minority interests (PATMI) was due to additional depreciation resulting from the change in the estimated residual values of its gas-fired power plant," Malakoff said in a statement today.

The change was necessary as the dependency on gas in the future generation mix will be less than coal, the independent power producer (IPP) said.

"On that basis, the previous assumption that the group's current portfolio of gas-fired power plants will be able to operate beyond their respective power purchase agreements (PPAs) tenures is no longer applicable," Malakoff said.

Meanwhile, revenue for the quarter jumped 25% to RM1.71 billion from RM1.38 billion a year ago, mainly contributed by its subsidiary Tanjung Bin Energy Sdn Bhd.

Tanjung Bin Energy had entered into commercial operation on March 21, 2016, Malakoff said.

The IPP also announced a 3.5 sen single-tier interim dividend compared to the 2 sen final single-tier dividend in the fourth quarter of its 2015 financial year (4QFY15).

For the full year (FY16), the group's net profit fell to RM355.46 million from RM452.39 million in the previous year although revenue had increased to RM6.1 billion from RM5.3 billion in FY15.

Although the change in residual value estimate had impacted the group's bottom line, Malakoff group managing director Datuk Wira Azhar Abdul Hamid said it had not affected the company's operating cash flow as Malakoff generated a net cash position of RM2.37 billion in FY16 from its operating activities.

"We are strategically on the lookout for new overseas ventures and acquisitions, including potential business diversification which would add value to our shareholders," Azhar said in the statement.

At 2.36pm, Malakoff shares rose 2 sen or 1.55% to RM1.31, for a market capitalisation of RM6.5 billion.

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